Correlation Between Cantargia and ExpreS2ion Biotech

Can any of the company-specific risk be diversified away by investing in both Cantargia and ExpreS2ion Biotech 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 ExpreS2ion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cantargia AB and ExpreS2ion Biotech Holding, you can compare the effects of market volatilities on Cantargia and ExpreS2ion Biotech 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 ExpreS2ion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and ExpreS2ion Biotech.

Diversification Opportunities for Cantargia and ExpreS2ion Biotech

-0.47

Correlation Coefficient

Cantargia  ExpreS2ion Biotech

Very good diversification

The 3 months correlation between Cantargia and ExpreS2ion is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and ExpreS2ion Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExpreS2ion Biotech 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 ExpreS2ion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExpreS2ion Biotech has no effect on the direction of Cantargia i.e., Cantargia and ExpreS2ion Biotech go up and down completely randomly.

Pair Corralation between Cantargia and ExpreS2ion Biotech

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the ExpreS2ion Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Cantargia AB is 2.04 times less risky than ExpreS2ion Biotech. The stock trades about -0.01 of its potential returns per unit of risk. The ExpreS2ion Biotech Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,996  in ExpreS2ion Biotech Holding on December 1, 2024 and sell it today you would earn a total of  644.00  from holding ExpreS2ion Biotech Holding or generate 32.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cantargia AB  vs.  ExpreS2ion Biotech Holding

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 comparatively stable basic indicators, Cantargia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ExpreS2ion Biotech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ExpreS2ion Biotech Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, ExpreS2ion Biotech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantargia and ExpreS2ion Biotech

The main advantage of trading using opposite Cantargia and ExpreS2ion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, ExpreS2ion Biotech 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 ExpreS2ion Biotech will offset losses from the drop in ExpreS2ion Biotech's long position.

The idea behind Cantargia AB and ExpreS2ion Biotech Holding 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..