Correlation Between Cessatech and Carnegie Wealth

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

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

Diversification Opportunities for Cessatech and Carnegie Wealth

-0.52

Correlation Coefficient

Cessatech  Carnegie Wealth

Excellent diversification

The 3 months correlation between Cessatech and Carnegie is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cessatech 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 Cessatech 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 Cessatech 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 Cessatech i.e., Cessatech and Carnegie Wealth go up and down completely randomly.

Pair Corralation between Cessatech and Carnegie Wealth

Assuming the 90 days trading horizon Cessatech AS is expected to under-perform the Carnegie Wealth. In addition to that, Cessatech is 4.3 times more volatile than Carnegie Wealth Management. It trades about -0.13 of its total potential returns per unit of risk. Carnegie Wealth Management is currently generating about 0.04 per unit of volatility. If you would invest  12,775  in Carnegie Wealth Management on September 7, 2024 and sell it today you would earn a total of  280.00  from holding Carnegie Wealth Management or generate 2.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	39.06%
Values	Daily Returns

Cessatech AS  vs.  Carnegie Wealth Management

Cessatech AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cessatech AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Carnegie Wealth Mana

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Carnegie Wealth Management are ranked lower than 3 (%) 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 Cessatech and Carnegie Wealth

The main advantage of trading using opposite Cessatech and Carnegie Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cessatech 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 Cessatech 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.