Correlation Between Arctic Gold and Clinical Laserthermia

Can any of the company-specific risk be diversified away by investing in both Arctic Gold and Clinical Laserthermia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Arctic Gold and Clinical Laserthermia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arctic Gold Publ and Clinical Laserthermia Systems, you can compare the effects of market volatilities on Arctic Gold and Clinical Laserthermia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Arctic Gold with a short position of Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Gold and Clinical Laserthermia.

Diversification Opportunities for Arctic Gold and Clinical Laserthermia

-0.12

Correlation Coefficient

Arctic Gold  Clinical Laserthermia

Good diversification

The 3 months correlation between Arctic and Clinical is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Gold Publ and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia and Arctic Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Arctic Gold Publ are associated (or correlated) with Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of Arctic Gold i.e., Arctic Gold and Clinical Laserthermia go up and down completely randomly.

Pair Corralation between Arctic Gold and Clinical Laserthermia

Assuming the 90 days trading horizon Arctic Gold Publ is expected to generate 1.91 times more return on investment than Clinical Laserthermia. However, Arctic Gold is 1.91 times more volatile than Clinical Laserthermia Systems. It trades about 0.13 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about -0.03 per unit of risk. If you would invest  26.00  in Arctic Gold Publ on December 2, 2024 and sell it today you would earn a total of  15.00  from holding Arctic Gold Publ or generate 57.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Arctic Gold Publ  vs.  Clinical Laserthermia Systems

Arctic Gold Publ

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arctic Gold Publ are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Arctic Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clinical Laserthermia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clinical Laserthermia Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Arctic Gold and Clinical Laserthermia

The main advantage of trading using opposite Arctic Gold and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Gold position performs unexpectedly, Clinical Laserthermia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Clinical Laserthermia will offset losses from the drop in Clinical Laserthermia's long position.

The idea behind Arctic Gold Publ and Clinical Laserthermia Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.