Correlation Between CBrain AS and SenzaGen

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

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

Diversification Opportunities for CBrain AS and SenzaGen

0.11

Correlation Coefficient

CBrain AS  SenzaGen

Average diversification

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

Pair Corralation between CBrain AS and SenzaGen

Assuming the 90 days trading horizon cBrain AS is expected to generate 1.24 times more return on investment than SenzaGen. However, CBrain AS is 1.24 times more volatile than SenzaGen AB. It trades about 0.02 of its potential returns per unit of risk. SenzaGen AB is currently generating about 0.01 per unit of risk. If you would invest  18,440  in cBrain AS on October 20, 2024 and sell it today you would earn a total of  100.00  from holding cBrain AS or generate 0.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

cBrain AS  vs.  SenzaGen AB

cBrain AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days cBrain AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SenzaGen AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SenzaGen AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CBrain AS and SenzaGen

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

The idea behind cBrain AS and SenzaGen 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .