Correlation Between Cantargia and AlzeCure Pharma

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

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

Diversification Opportunities for Cantargia and AlzeCure Pharma

0.89

Correlation Coefficient

Cantargia  AlzeCure Pharma

Very poor diversification

The 3 months correlation between Cantargia and AlzeCure is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and AlzeCure Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlzeCure Pharma and Cantargia 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 Cantargia AB are associated (or correlated) with AlzeCure Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlzeCure Pharma has no effect on the direction of Cantargia i.e., Cantargia and AlzeCure Pharma go up and down completely randomly.

Pair Corralation between Cantargia and AlzeCure Pharma

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the AlzeCure Pharma. In addition to that, Cantargia is 1.39 times more volatile than AlzeCure Pharma. It trades about -0.17 of its total potential returns per unit of risk. AlzeCure Pharma is currently generating about -0.16 per unit of volatility. If you would invest  199.00  in AlzeCure Pharma on September 2, 2024 and sell it today you would lose (80.00) from holding AlzeCure Pharma or give up 40.2% of portfolio value over 90 days.

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

Cantargia AB  vs.  AlzeCure Pharma

Cantargia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantargia AB 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

AlzeCure Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AlzeCure Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cantargia and AlzeCure Pharma

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

The idea behind Cantargia AB and AlzeCure Pharma 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.