Correlation Between Niloerngruppen and Cantargia

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

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

Diversification Opportunities for Niloerngruppen and Cantargia

-0.19

Correlation Coefficient

Niloerngruppen  Cantargia

Good diversification

The 3 months correlation between Niloerngruppen and Cantargia is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Niloerngruppen AB Series and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB and Niloerngruppen 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 Niloerngruppen AB Series are associated (or correlated) with Cantargia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantargia AB has no effect on the direction of Niloerngruppen i.e., Niloerngruppen and Cantargia go up and down completely randomly.

Pair Corralation between Niloerngruppen and Cantargia

Assuming the 90 days trading horizon Niloerngruppen AB Series is expected to generate 0.79 times more return on investment than Cantargia. However, Niloerngruppen AB Series is 1.27 times less risky than Cantargia. It trades about 0.05 of its potential returns per unit of risk. Cantargia AB is currently generating about -0.2 per unit of risk. If you would invest  6,700  in Niloerngruppen AB Series on October 7, 2024 and sell it today you would earn a total of  80.00  from holding Niloerngruppen AB Series or generate 1.19% return on investment over 90 days.

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

Niloerngruppen AB Series  vs.  Cantargia AB

Niloerngruppen AB Series

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Niloerngruppen AB Series are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Niloerngruppen may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cantargia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantargia AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Niloerngruppen and Cantargia

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

The idea behind Niloerngruppen AB Series and Cantargia 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.