Correlation Between Camurus AB and Scibase AB

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

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

Diversification Opportunities for Camurus AB and Scibase AB

0.78

Correlation Coefficient

Camurus AB  Scibase AB

Poor diversification

The 3 months correlation between Camurus and Scibase is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Camurus AB and Scibase AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scibase AB and Camurus AB 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 Camurus AB are associated (or correlated) with Scibase AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scibase AB has no effect on the direction of Camurus AB i.e., Camurus AB and Scibase AB go up and down completely randomly.

Pair Corralation between Camurus AB and Scibase AB

Assuming the 90 days trading horizon Camurus AB is expected to generate 13.72 times less return on investment than Scibase AB. But when comparing it to its historical volatility, Camurus AB is 3.71 times less risky than Scibase AB. It trades about 0.05 of its potential returns per unit of risk. Scibase AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Scibase AB on September 27, 2024 and sell it today you would earn a total of  7.00  from holding Scibase AB or generate 20.0% return on investment over 90 days.

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

Camurus AB  vs.  Scibase AB

Camurus AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camurus AB 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.

Scibase AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scibase AB 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 Camurus AB and Scibase AB

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

The idea behind Camurus AB and Scibase AB 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.