Correlation Between Cessatech and Nordinvestments

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

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

Diversification Opportunities for Cessatech and Nordinvestments

0.0

Correlation Coefficient

Cessatech  Nordinvestments

Pay attention - limited upside

The 3 months correlation between Cessatech and Nordinvestments is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cessatech AS and Nordinvestments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordinvestments AS 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 Nordinvestments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordinvestments AS has no effect on the direction of Cessatech i.e., Cessatech and Nordinvestments go up and down completely randomly.

Pair Corralation between Cessatech and Nordinvestments

Assuming the 90 days trading horizon Cessatech AS is expected to under-perform the Nordinvestments. But the stock apears to be less risky and, when comparing its historical volatility, Cessatech AS is 1.44 times less risky than Nordinvestments. The stock trades about -0.1 of its potential returns per unit of risk. The Nordinvestments AS is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  364.00  in Nordinvestments AS on October 4, 2024 and sell it today you would lose (241.00) from holding Nordinvestments AS or give up 66.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	8.33%
Values	Daily Returns

Cessatech AS  vs.  Nordinvestments AS

Cessatech AS

Risk-Adjusted Performance

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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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Nordinvestments AS

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Nordinvestments AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Nordinvestments is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cessatech and Nordinvestments

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

The idea behind Cessatech AS and Nordinvestments AS 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..