Correlation Between Strer SE and CyberAgent

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

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

Diversification Opportunities for Strer SE and CyberAgent

-0.47

Correlation Coefficient

Strer SE  CyberAgent

Very good diversification

The 3 months correlation between Strer and CyberAgent is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Strer SE Co and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent and Strer SE 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 Strer SE Co are associated (or correlated) with CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of Strer SE i.e., Strer SE and CyberAgent go up and down completely randomly.

Pair Corralation between Strer SE and CyberAgent

Assuming the 90 days trading horizon Strer SE is expected to generate 1.25 times less return on investment than CyberAgent. In addition to that, Strer SE is 1.51 times more volatile than CyberAgent. It trades about 0.01 of its total potential returns per unit of risk. CyberAgent is currently generating about 0.01 per unit of volatility. If you would invest  650.00  in CyberAgent on October 13, 2024 and sell it today you would earn a total of  0.00  from holding CyberAgent or generate 0.0% return on investment over 90 days.

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

Strer SE Co  vs.  CyberAgent

Strer SE

Risk-Adjusted Performance

0 of 100

Very Weak

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

CyberAgent

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days CyberAgent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CyberAgent is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Strer SE and CyberAgent

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

The idea behind Strer SE Co and CyberAgent 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..