Correlation Between Cortus Energy and Serstech

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

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

Diversification Opportunities for Cortus Energy and Serstech

0.55

Correlation Coefficient

Cortus Energy  Serstech

Very weak diversification

The 3 months correlation between Cortus and Serstech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cortus Energy AB and Serstech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serstech AB and Cortus Energy 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 Cortus Energy AB are associated (or correlated) with Serstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serstech AB has no effect on the direction of Cortus Energy i.e., Cortus Energy and Serstech go up and down completely randomly.

Pair Corralation between Cortus Energy and Serstech

Assuming the 90 days horizon Cortus Energy AB is expected to under-perform the Serstech. In addition to that, Cortus Energy is 1.19 times more volatile than Serstech AB. It trades about -0.12 of its total potential returns per unit of risk. Serstech AB is currently generating about 0.1 per unit of volatility. If you would invest  108.00  in Serstech AB on September 4, 2024 and sell it today you would earn a total of  17.00  from holding Serstech AB or generate 15.74% return on investment over 90 days.

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

Cortus Energy AB  vs.  Serstech AB

Cortus Energy AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cortus Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Serstech AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Serstech AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Serstech is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cortus Energy and Serstech

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

The idea behind Cortus Energy AB and Serstech 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.