Correlation Between Can2 Termik and Creditwest Faktoring

Can any of the company-specific risk be diversified away by investing in both Can2 Termik and Creditwest Faktoring 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 Can2 Termik and Creditwest Faktoring into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Can2 Termik AS and Creditwest Faktoring AS, you can compare the effects of market volatilities on Can2 Termik and Creditwest Faktoring 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 Can2 Termik with a short position of Creditwest Faktoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Can2 Termik and Creditwest Faktoring.

Diversification Opportunities for Can2 Termik and Creditwest Faktoring

0.11

Correlation Coefficient

Can2 Termik  Creditwest Faktoring

Average diversification

The 3 months correlation between Can2 and Creditwest is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Can2 Termik AS and Creditwest Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creditwest Faktoring and Can2 Termik 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 Can2 Termik AS are associated (or correlated) with Creditwest Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creditwest Faktoring has no effect on the direction of Can2 Termik i.e., Can2 Termik and Creditwest Faktoring go up and down completely randomly.

Pair Corralation between Can2 Termik and Creditwest Faktoring

Assuming the 90 days trading horizon Can2 Termik AS is expected to generate 10.86 times more return on investment than Creditwest Faktoring. However, Can2 Termik is 10.86 times more volatile than Creditwest Faktoring AS. It trades about 0.04 of its potential returns per unit of risk. Creditwest Faktoring AS is currently generating about 0.06 per unit of risk. If you would invest  426.00  in Can2 Termik AS on October 24, 2024 and sell it today you would lose (263.00) from holding Can2 Termik AS or give up 61.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Can2 Termik AS  vs.  Creditwest Faktoring AS

Can2 Termik AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Can2 Termik AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Can2 Termik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Creditwest Faktoring

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Creditwest Faktoring demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Can2 Termik and Creditwest Faktoring

The main advantage of trading using opposite Can2 Termik and Creditwest Faktoring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Can2 Termik position performs unexpectedly, Creditwest Faktoring 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 Creditwest Faktoring will offset losses from the drop in Creditwest Faktoring's long position.

The idea behind Can2 Termik AS and Creditwest Faktoring AS 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.