Correlation Between CBrain AS and Nykredit Invest

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

By analyzing existing cross correlation between cBrain AS and Nykredit Invest Korte, you can compare the effects of market volatilities on CBrain AS and Nykredit Invest 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 Nykredit Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Nykredit Invest.

Diversification Opportunities for CBrain AS and Nykredit Invest

0.17

Correlation Coefficient

CBrain AS  Nykredit Invest

Average diversification

The 3 months correlation between CBrain and Nykredit is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Nykredit Invest Korte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Korte 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 Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Korte has no effect on the direction of CBrain AS i.e., CBrain AS and Nykredit Invest go up and down completely randomly.

Pair Corralation between CBrain AS and Nykredit Invest

Assuming the 90 days trading horizon cBrain AS is expected to generate 38.25 times more return on investment than Nykredit Invest. However, CBrain AS is 38.25 times more volatile than Nykredit Invest Korte. It trades about 0.01 of its potential returns per unit of risk. Nykredit Invest Korte is currently generating about 0.25 per unit of risk. If you would invest  20,000  in cBrain AS on September 14, 2024 and sell it today you would earn a total of  50.00  from holding cBrain AS or generate 0.25% return on investment over 90 days.

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

cBrain AS  vs.  Nykredit Invest Korte

cBrain AS

Risk-Adjusted Performance

1 of 100

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.

Nykredit Invest Korte

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nykredit Invest Korte are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Nykredit Invest is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CBrain AS and Nykredit Invest

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

The idea behind cBrain AS and Nykredit Invest Korte 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.