Correlation Between CirChem AB and Cyber Security

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

By analyzing existing cross correlation between CirChem AB and Cyber Security 1, you can compare the effects of market volatilities on CirChem AB and Cyber Security 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 CirChem AB with a short position of Cyber Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of CirChem AB and Cyber Security.

Diversification Opportunities for CirChem AB and Cyber Security

-0.82

Correlation Coefficient

CirChem AB  Cyber Security

Pay attention - limited upside

The 3 months correlation between CirChem and Cyber is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding CirChem AB and Cyber Security 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Security 1 and CirChem AB 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 CirChem AB are associated (or correlated) with Cyber Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Security 1 has no effect on the direction of CirChem AB i.e., CirChem AB and Cyber Security go up and down completely randomly.

Pair Corralation between CirChem AB and Cyber Security

Assuming the 90 days trading horizon CirChem AB is expected to generate 0.71 times more return on investment than Cyber Security. However, CirChem AB is 1.4 times less risky than Cyber Security. It trades about 0.19 of its potential returns per unit of risk. Cyber Security 1 is currently generating about -0.07 per unit of risk. If you would invest  259.00  in CirChem AB on October 3, 2024 and sell it today you would earn a total of  139.00  from holding CirChem AB or generate 53.67% return on investment over 90 days.

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

CirChem AB  vs.  Cyber Security 1

CirChem AB

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CirChem AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, CirChem AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Cyber Security 1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyber Security 1 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 basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CirChem AB and Cyber Security

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

The idea behind CirChem AB and Cyber Security 1 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.