Correlation Between Cadeler As and Photocure

Can any of the company-specific risk be diversified away by investing in both Cadeler As and Photocure 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 Cadeler As and Photocure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cadeler As and Photocure, you can compare the effects of market volatilities on Cadeler As and Photocure 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 Cadeler As with a short position of Photocure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadeler As and Photocure.

Diversification Opportunities for Cadeler As and Photocure

-0.05

Correlation Coefficient

Cadeler As  Photocure

Good diversification

The 3 months correlation between Cadeler and Photocure is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler As and Photocure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photocure and Cadeler As 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 Cadeler As are associated (or correlated) with Photocure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photocure has no effect on the direction of Cadeler As i.e., Cadeler As and Photocure go up and down completely randomly.

Pair Corralation between Cadeler As and Photocure

Assuming the 90 days trading horizon Cadeler As is expected to under-perform the Photocure. But the stock apears to be less risky and, when comparing its historical volatility, Cadeler As is 1.35 times less risky than Photocure. The stock trades about -0.07 of its potential returns per unit of risk. The Photocure is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,340  in Photocure on September 13, 2024 and sell it today you would earn a total of  510.00  from holding Photocure or generate 9.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Cadeler As  vs.  Photocure

Cadeler As

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cadeler As has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Photocure

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Photocure are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Photocure may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cadeler As and Photocure

The main advantage of trading using opposite Cadeler As and Photocure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadeler As position performs unexpectedly, Photocure 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 Photocure will offset losses from the drop in Photocure's long position.

The idea behind Cadeler As and Photocure 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.