Correlation Between Cardno and Internationella Engelska

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

By analyzing existing cross correlation between Cardno Limited and Internationella Engelska Skolan, you can compare the effects of market volatilities on Cardno and Internationella Engelska 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 Cardno with a short position of Internationella Engelska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardno and Internationella Engelska.

Diversification Opportunities for Cardno and Internationella Engelska

-0.68

Correlation Coefficient

Cardno  Internationella Engelska

Excellent diversification

The 3 months correlation between Cardno and Internationella is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cardno Limited and Internationella Engelska Skola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internationella Engelska and Cardno 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 Cardno Limited are associated (or correlated) with Internationella Engelska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internationella Engelska has no effect on the direction of Cardno i.e., Cardno and Internationella Engelska go up and down completely randomly.

Pair Corralation between Cardno and Internationella Engelska

Assuming the 90 days horizon Cardno Limited is expected to under-perform the Internationella Engelska. In addition to that, Cardno is 1.19 times more volatile than Internationella Engelska Skolan. It trades about -0.14 of its total potential returns per unit of risk. Internationella Engelska Skolan is currently generating about -0.06 per unit of volatility. If you would invest  127.00  in Internationella Engelska Skolan on October 11, 2024 and sell it today you would lose (19.00) from holding Internationella Engelska Skolan or give up 14.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	65.57%
Values	Daily Returns

Cardno Limited  vs.  Internationella Engelska Skola

Cardno Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardno Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Internationella Engelska

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Internationella Engelska Skolan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cardno and Internationella Engelska

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

The idea behind Cardno Limited and Internationella Engelska Skolan 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.