Correlation Between Integrum and C Rad

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

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

Diversification Opportunities for Integrum and C Rad

-0.13

Correlation Coefficient

Integrum  C Rad

Good diversification

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

Pair Corralation between Integrum and C Rad

Assuming the 90 days trading horizon Integrum AB Series is expected to generate 1.95 times more return on investment than C Rad. However, Integrum is 1.95 times more volatile than C Rad AB. It trades about 0.02 of its potential returns per unit of risk. C Rad AB is currently generating about 0.02 per unit of risk. 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

Integrum AB Series  vs.  C Rad AB

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 weak 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.

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.

Pair Trading with Integrum and C Rad

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

The idea behind Integrum AB Series and C Rad AB 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.