Correlation Between Fundamental Invest and CBrain AS

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

By analyzing existing cross correlation between Fundamental Invest Stock and cBrain AS, you can compare the effects of market volatilities on Fundamental Invest and CBrain AS 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 Fundamental Invest with a short position of CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Invest and CBrain AS.

Diversification Opportunities for Fundamental Invest and CBrain AS

0.59

Correlation Coefficient

Fundamental Invest  CBrain AS

Very weak diversification

The 3 months correlation between Fundamental and CBrain is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Invest Stock and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS and Fundamental Invest 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 Fundamental Invest Stock are associated (or correlated) with CBrain AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cBrain AS has no effect on the direction of Fundamental Invest i.e., Fundamental Invest and CBrain AS go up and down completely randomly.

Pair Corralation between Fundamental Invest and CBrain AS

Assuming the 90 days trading horizon Fundamental Invest Stock is expected to under-perform the CBrain AS. But the stock apears to be less risky and, when comparing its historical volatility, Fundamental Invest Stock is 2.48 times less risky than CBrain AS. The stock trades about -0.12 of its potential returns per unit of risk. The cBrain AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  18,580  in cBrain AS on December 26, 2024 and sell it today you would lose (620.00) from holding cBrain AS or give up 3.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Fundamental Invest Stock  vs.  cBrain AS

Fundamental Invest Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fundamental Invest Stock 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 fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

cBrain AS

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Fundamental Invest and CBrain AS

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

The idea behind Fundamental Invest Stock and cBrain AS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..