Correlation Between Cantargia and Klaria Pharma

Can any of the company-specific risk be diversified away by investing in both Cantargia and Klaria 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 Klaria 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 Klaria Pharma Holding, you can compare the effects of market volatilities on Cantargia and Klaria 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 Klaria Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Klaria Pharma.

Diversification Opportunities for Cantargia and Klaria Pharma

-0.45

Correlation Coefficient

Cantargia  Klaria Pharma

Very good diversification

The 3 months correlation between Cantargia and Klaria is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Klaria Pharma Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klaria Pharma Holding 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 Klaria Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klaria Pharma Holding has no effect on the direction of Cantargia i.e., Cantargia and Klaria Pharma go up and down completely randomly.

Pair Corralation between Cantargia and Klaria Pharma

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Klaria Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Cantargia AB is 2.44 times less risky than Klaria Pharma. The stock trades about -0.04 of its potential returns per unit of risk. The Klaria Pharma Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Klaria Pharma Holding on December 2, 2024 and sell it today you would earn a total of  77.00  from holding Klaria Pharma Holding or generate 106.94% 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.  Klaria Pharma 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.

Klaria Pharma Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Klaria Pharma Holding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Klaria Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantargia and Klaria Pharma

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

The idea behind Cantargia AB and Klaria Pharma 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.