Correlation Between Cadeler As and Pyrum Innovations

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

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

Diversification Opportunities for Cadeler As and Pyrum Innovations

-0.21

Correlation Coefficient

Cadeler As  Pyrum Innovations

Very good diversification

The 3 months correlation between Cadeler and Pyrum is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler As and Pyrum Innovations AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyrum Innovations 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 Pyrum Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyrum Innovations has no effect on the direction of Cadeler As i.e., Cadeler As and Pyrum Innovations go up and down completely randomly.

Pair Corralation between Cadeler As and Pyrum Innovations

Assuming the 90 days trading horizon Cadeler As is expected to under-perform the Pyrum Innovations. But the stock apears to be less risky and, when comparing its historical volatility, Cadeler As is 1.32 times less risky than Pyrum Innovations. The stock trades about -0.12 of its potential returns per unit of risk. The Pyrum Innovations AG is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  32,300  in Pyrum Innovations AG on December 30, 2024 and sell it today you would lose (2,300) from holding Pyrum Innovations AG or give up 7.12% of portfolio value over 90 days.

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

Cadeler As  vs.  Pyrum Innovations AG

Cadeler As

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pyrum Innovations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pyrum Innovations AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Pyrum Innovations is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cadeler As and Pyrum Innovations

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

The idea behind Cadeler As and Pyrum Innovations AG 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.