Correlation Between Carasent ASA and Ultimovacs ASA

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

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

Diversification Opportunities for Carasent ASA and Ultimovacs ASA

-0.05

Correlation Coefficient

Carasent ASA  Ultimovacs ASA

Good diversification

The 3 months correlation between Carasent and Ultimovacs is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Carasent ASA and Ultimovacs ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultimovacs ASA and Carasent ASA 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 Carasent ASA are associated (or correlated) with Ultimovacs ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultimovacs ASA has no effect on the direction of Carasent ASA i.e., Carasent ASA and Ultimovacs ASA go up and down completely randomly.

Pair Corralation between Carasent ASA and Ultimovacs ASA

Assuming the 90 days trading horizon Carasent ASA is expected to generate 0.33 times more return on investment than Ultimovacs ASA. However, Carasent ASA is 3.06 times less risky than Ultimovacs ASA. It trades about 0.1 of its potential returns per unit of risk. Ultimovacs ASA is currently generating about -0.05 per unit of risk. If you would invest  1,815  in Carasent ASA on August 31, 2024 and sell it today you would earn a total of  245.00  from holding Carasent ASA or generate 13.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Carasent ASA  vs.  Ultimovacs ASA

Carasent ASA

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carasent ASA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Carasent ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ultimovacs ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultimovacs ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Carasent ASA and Ultimovacs ASA

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

The idea behind Carasent ASA and Ultimovacs ASA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.