Correlation Between Cantargia and Vitrolife

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Can any of the company-specific risk be diversified away by investing in both Cantargia and Vitrolife 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 Vitrolife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and Vitrolife AB, you can compare the effects of market volatilities on Cantargia and Vitrolife 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 Vitrolife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Vitrolife.

Diversification Opportunities for Cantargia and Vitrolife

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Cantargia and Vitrolife is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Vitrolife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitrolife 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 Vitrolife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitrolife AB has no effect on the direction of Cantargia i.e., Cantargia and Vitrolife go up and down completely randomly.

Pair Corralation between Cantargia and Vitrolife

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Vitrolife. In addition to that, Cantargia is 2.87 times more volatile than Vitrolife AB. It trades about -0.18 of its total potential returns per unit of risk. Vitrolife AB is currently generating about -0.11 per unit of volatility. If you would invest  25,000  in Vitrolife AB on September 14, 2024 and sell it today you would lose (3,600) from holding Vitrolife AB or give up 14.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Cantargia AB  vs.  Vitrolife AB

 Performance 
       Timeline  
Cantargia AB 

Risk-Adjusted Performance

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Weak
 
Strong
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 unfluctuating 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.
Vitrolife AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vitrolife 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.

Cantargia and Vitrolife Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cantargia and Vitrolife

The main advantage of trading using opposite Cantargia and Vitrolife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, Vitrolife 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 Vitrolife will offset losses from the drop in Vitrolife's long position.
The idea behind Cantargia AB and Vitrolife 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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