Correlation Between Cantargia and Combigene

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

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

Diversification Opportunities for Cantargia and Combigene

0.11

Correlation Coefficient

Cantargia  Combigene

Average diversification

The 3 months correlation between Cantargia and Combigene is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Combigene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Combigene 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 Combigene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Combigene AB has no effect on the direction of Cantargia i.e., Cantargia and Combigene go up and down completely randomly.

Pair Corralation between Cantargia and Combigene

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Combigene. In addition to that, Cantargia is 1.05 times more volatile than Combigene AB. It trades about -0.05 of its total potential returns per unit of risk. Combigene AB is currently generating about 0.0 per unit of volatility. If you would invest  246.00  in Combigene AB on December 26, 2024 and sell it today you would lose (6.00) from holding Combigene AB or give up 2.44% of portfolio value over 90 days.

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

Cantargia AB  vs.  Combigene 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 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.

Combigene AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Combigene AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Combigene is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cantargia and Combigene

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

The idea behind Cantargia AB and Combigene 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.