Correlation Between Cantargia and Bio Works

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

By analyzing existing cross correlation between Cantargia AB and Bio Works Technologies AB, you can compare the effects of market volatilities on Cantargia and Bio Works 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 Bio Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Bio Works.

Diversification Opportunities for Cantargia and Bio Works

-0.56

Correlation Coefficient

Cantargia  Bio Works

Excellent diversification

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

Pair Corralation between Cantargia and Bio Works

Assuming the 90 days trading horizon Cantargia AB is expected to generate 0.74 times more return on investment than Bio Works. However, Cantargia AB is 1.35 times less risky than Bio Works. It trades about -0.05 of its potential returns per unit of risk. Bio Works Technologies AB is currently generating about -0.06 per unit of risk. If you would invest  697.00  in Cantargia AB on December 4, 2024 and sell it today you would lose (539.00) from holding Cantargia AB or give up 77.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Cantargia AB  vs.  Bio Works Technologies AB

Cantargia AB

Risk-Adjusted Performance

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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bio Works Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Works Technologies AB are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bio Works sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantargia and Bio Works

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

The idea behind Cantargia AB and Bio Works Technologies 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.