Correlation Between Cantargia and Maha Energy

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

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

Diversification Opportunities for Cantargia and Maha Energy

0.57

Correlation Coefficient

Cantargia  Maha Energy

Very weak diversification

The 3 months correlation between Cantargia and Maha is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Maha Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Energy 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 Maha Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Energy AB has no effect on the direction of Cantargia i.e., Cantargia and Maha Energy go up and down completely randomly.

Pair Corralation between Cantargia and Maha Energy

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Maha Energy. In addition to that, Cantargia is 4.04 times more volatile than Maha Energy AB. It trades about -0.24 of its total potential returns per unit of risk. Maha Energy AB is currently generating about 0.31 per unit of volatility. If you would invest  606.00  in Maha Energy AB on September 5, 2024 and sell it today you would earn a total of  83.00  from holding Maha Energy AB or generate 13.7% return on investment over 90 days.

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

Cantargia AB  vs.  Maha Energy 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.

Maha Energy AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maha Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Cantargia and Maha Energy

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

The idea behind Cantargia AB and Maha Energy 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.