Correlation Between Claranova and Blockchain Group

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

By analyzing existing cross correlation between Claranova SE and Blockchain Group SA, you can compare the effects of market volatilities on Claranova and Blockchain Group 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 Claranova with a short position of Blockchain Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Blockchain Group.

Diversification Opportunities for Claranova and Blockchain Group

0.19

Correlation Coefficient

Claranova  Blockchain Group

Average diversification

The 3 months correlation between Claranova and Blockchain is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Blockchain Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Group and Claranova 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 Claranova SE are associated (or correlated) with Blockchain Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Group has no effect on the direction of Claranova i.e., Claranova and Blockchain Group go up and down completely randomly.

Pair Corralation between Claranova and Blockchain Group

Assuming the 90 days trading horizon Claranova SE is expected to generate 0.54 times more return on investment than Blockchain Group. However, Claranova SE is 1.85 times less risky than Blockchain Group. It trades about 0.13 of its potential returns per unit of risk. Blockchain Group SA is currently generating about 0.07 per unit of risk. If you would invest  140.00  in Claranova SE on December 1, 2024 and sell it today you would earn a total of  44.00  from holding Claranova SE or generate 31.43% return on investment over 90 days.

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

Claranova SE  vs.  Blockchain Group SA

Claranova SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Claranova SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Claranova sustained solid returns over the last few months and may actually be approaching a breakup point.

Blockchain Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blockchain Group SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Blockchain Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Claranova and Blockchain Group

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

The idea behind Claranova SE and Blockchain Group SA 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.