Correlation Between CBrain AS and Carnegie Wealth

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

By analyzing existing cross correlation between cBrain AS and Carnegie Wealth Management, you can compare the effects of market volatilities on CBrain AS and Carnegie Wealth 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 CBrain AS with a short position of Carnegie Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Carnegie Wealth.

Diversification Opportunities for CBrain AS and Carnegie Wealth

-0.5

Correlation Coefficient

CBrain AS  Carnegie Wealth

Very good diversification

The 3 months correlation between CBrain and Carnegie is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Carnegie Wealth Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Wealth Mana and CBrain AS 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 cBrain AS are associated (or correlated) with Carnegie Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Wealth Mana has no effect on the direction of CBrain AS i.e., CBrain AS and Carnegie Wealth go up and down completely randomly.

Pair Corralation between CBrain AS and Carnegie Wealth

Assuming the 90 days trading horizon CBrain AS is expected to generate 1.1 times less return on investment than Carnegie Wealth. In addition to that, CBrain AS is 4.18 times more volatile than Carnegie Wealth Management. It trades about 0.02 of its total potential returns per unit of risk. Carnegie Wealth Management is currently generating about 0.09 per unit of volatility. If you would invest  12,610  in Carnegie Wealth Management on December 26, 2024 and sell it today you would earn a total of  735.00  from holding Carnegie Wealth Management or generate 5.83% return on investment over 90 days.

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

cBrain AS  vs.  Carnegie Wealth Management

cBrain AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in cBrain AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CBrain AS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Carnegie Wealth Mana

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Wealth Management are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Carnegie Wealth is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CBrain AS and Carnegie Wealth

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

The idea behind cBrain AS and Carnegie Wealth Management 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.