Correlation Between CAG Group and B3 Consulting

Can any of the company-specific risk be diversified away by investing in both CAG Group and B3 Consulting 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 CAG Group and B3 Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CAG Group AB and B3 Consulting Group, you can compare the effects of market volatilities on CAG Group and B3 Consulting 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 CAG Group with a short position of B3 Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAG Group and B3 Consulting.

Diversification Opportunities for CAG Group and B3 Consulting

-0.13

Correlation Coefficient

CAG Group  B3 Consulting

Good diversification

The 3 months correlation between CAG and B3 Consulting is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CAG Group AB and B3 Consulting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B3 Consulting Group and CAG Group 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 CAG Group AB are associated (or correlated) with B3 Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B3 Consulting Group has no effect on the direction of CAG Group i.e., CAG Group and B3 Consulting go up and down completely randomly.

Pair Corralation between CAG Group and B3 Consulting

Assuming the 90 days trading horizon CAG Group AB is expected to generate 0.55 times more return on investment than B3 Consulting. However, CAG Group AB is 1.81 times less risky than B3 Consulting. It trades about 0.02 of its potential returns per unit of risk. B3 Consulting Group is currently generating about -0.12 per unit of risk. If you would invest  11,000  in CAG Group AB on August 31, 2024 and sell it today you would earn a total of  100.00  from holding CAG Group AB or generate 0.91% return on investment over 90 days.

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

CAG Group AB  vs.  B3 Consulting Group

CAG Group AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CAG Group AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, CAG Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

B3 Consulting Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B3 Consulting Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CAG Group and B3 Consulting

The main advantage of trading using opposite CAG Group and B3 Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAG Group position performs unexpectedly, B3 Consulting 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 B3 Consulting will offset losses from the drop in B3 Consulting's long position.

The idea behind CAG Group AB and B3 Consulting Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.