Correlation Between Cadeler As and Zaptec AS

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

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

Diversification Opportunities for Cadeler As and Zaptec AS

0.56

Correlation Coefficient

Cadeler As  Zaptec AS

Very weak diversification

The 3 months correlation between Cadeler and Zaptec is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler As and Zaptec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaptec AS 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 Zaptec AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaptec AS has no effect on the direction of Cadeler As i.e., Cadeler As and Zaptec AS go up and down completely randomly.

Pair Corralation between Cadeler As and Zaptec AS

Assuming the 90 days trading horizon Cadeler As is expected to under-perform the Zaptec AS. But the stock apears to be less risky and, when comparing its historical volatility, Cadeler As is 2.04 times less risky than Zaptec AS. The stock trades about -0.22 of its potential returns per unit of risk. The Zaptec AS is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  924.00  in Zaptec AS on October 11, 2024 and sell it today you would earn a total of  139.00  from holding Zaptec AS or generate 15.04% return on investment over 90 days.

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

Cadeler As  vs.  Zaptec AS

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

Zaptec AS

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zaptec AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Zaptec AS is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cadeler As and Zaptec AS

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

The idea behind Cadeler As and Zaptec AS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..