Correlation Between Online Brands and Cinis Fertilizer

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

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

Diversification Opportunities for Online Brands and Cinis Fertilizer

0.0

Correlation Coefficient

Online Brands  Cinis Fertilizer

Pay attention - limited upside

The 3 months correlation between Online and Cinis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Online Brands Nordic and Cinis Fertilizer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinis Fertilizer and Online Brands 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 Online Brands Nordic are associated (or correlated) with Cinis Fertilizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinis Fertilizer has no effect on the direction of Online Brands i.e., Online Brands and Cinis Fertilizer go up and down completely randomly.

Pair Corralation between Online Brands and Cinis Fertilizer

Assuming the 90 days trading horizon Online Brands Nordic is expected to generate 1.2 times more return on investment than Cinis Fertilizer. However, Online Brands is 1.2 times more volatile than Cinis Fertilizer AB. It trades about 0.0 of its potential returns per unit of risk. Cinis Fertilizer AB is currently generating about -0.07 per unit of risk. If you would invest  2,600  in Online Brands Nordic on October 9, 2024 and sell it today you would lose (1,065) from holding Online Brands Nordic or give up 40.96% of portfolio value over 90 days.

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

Online Brands Nordic  vs.  Cinis Fertilizer AB

Online Brands Nordic

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Online Brands Nordic are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Online Brands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cinis Fertilizer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cinis Fertilizer 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 Online Brands and Cinis Fertilizer

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

The idea behind Online Brands Nordic and Cinis Fertilizer 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.