Correlation Between Cantargia and Bambuser

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

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

Diversification Opportunities for Cantargia and Bambuser

0.87

Correlation Coefficient

Cantargia  Bambuser

Very poor diversification

The 3 months correlation between Cantargia and Bambuser is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Bambuser AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bambuser AB 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 Bambuser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bambuser AB has no effect on the direction of Cantargia i.e., Cantargia and Bambuser go up and down completely randomly.

Pair Corralation between Cantargia and Bambuser

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Bambuser. In addition to that, Cantargia is 1.08 times more volatile than Bambuser AB. It trades about -0.16 of its total potential returns per unit of risk. Bambuser AB is currently generating about -0.11 per unit of volatility. If you would invest  98.00  in Bambuser AB on September 5, 2024 and sell it today you would lose (39.00) from holding Bambuser AB or give up 39.8% 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.  Bambuser AB

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 weak 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.

Bambuser AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bambuser 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.

Pair Trading with Cantargia and Bambuser

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

The idea behind Cantargia AB and Bambuser 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.