Correlation Between C Rad and Integrum

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

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

Diversification Opportunities for C Rad and Integrum

-0.13

Correlation Coefficient

C Rad  Integrum

Good diversification

The 3 months correlation between CRAD-B and Integrum is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding C Rad AB and Integrum AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrum AB Series and C Rad 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 C Rad AB are associated (or correlated) with Integrum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrum AB Series has no effect on the direction of C Rad i.e., C Rad and Integrum go up and down completely randomly.

Pair Corralation between C Rad and Integrum

Assuming the 90 days trading horizon C Rad is expected to generate 2.18 times less return on investment than Integrum. But when comparing it to its historical volatility, C Rad AB is 1.95 times less risky than Integrum. It trades about 0.02 of its potential returns per unit of risk. Integrum AB Series is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,758  in Integrum AB Series on October 23, 2024 and sell it today you would earn a total of  27.00  from holding Integrum AB Series or generate 1.54% return on investment over 90 days.

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

C Rad AB  vs.  Integrum AB Series

C Rad AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C Rad AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, C Rad is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Integrum AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrum AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with C Rad and Integrum

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

The idea behind C Rad AB and Integrum AB Series 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.