Correlation Between C Rad and New Nordic

Can any of the company-specific risk be diversified away by investing in both C Rad and New Nordic 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 New Nordic 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 New Nordic Healthbrands, you can compare the effects of market volatilities on C Rad and New Nordic 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 New Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Rad and New Nordic.

Diversification Opportunities for C Rad and New Nordic

0.21

Correlation Coefficient

C Rad  New Nordic

Modest diversification

The 3 months correlation between CRAD-B and New is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding C Rad AB and New Nordic Healthbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Nordic Healthbrands 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 New Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Nordic Healthbrands has no effect on the direction of C Rad i.e., C Rad and New Nordic go up and down completely randomly.

Pair Corralation between C Rad and New Nordic

Assuming the 90 days trading horizon C Rad AB is expected to generate 0.88 times more return on investment than New Nordic. However, C Rad AB is 1.13 times less risky than New Nordic. It trades about -0.02 of its potential returns per unit of risk. New Nordic Healthbrands is currently generating about -0.04 per unit of risk. If you would invest  3,000  in C Rad AB on December 30, 2024 and sell it today you would lose (120.00) from holding C Rad AB or give up 4.0% of portfolio value over 90 days.

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

C Rad AB  vs.  New Nordic Healthbrands

C Rad AB

Risk-Adjusted Performance

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.

New Nordic Healthbrands

Risk-Adjusted Performance

Very Weak

Over the last 90 days New Nordic Healthbrands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, New Nordic is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with C Rad and New Nordic

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

The idea behind C Rad AB and New Nordic Healthbrands 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.