Correlation Between Senzime AB and C Rad

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

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

Diversification Opportunities for Senzime AB and C Rad

0.49

Correlation Coefficient

Senzime AB  C Rad

Very weak diversification

The 3 months correlation between Senzime and CRAD-B is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Senzime AB 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 Senzime AB 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 Senzime AB 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 Senzime AB i.e., Senzime AB and C Rad go up and down completely randomly.

Pair Corralation between Senzime AB and C Rad

Assuming the 90 days trading horizon Senzime AB is expected to generate 0.84 times more return on investment than C Rad. However, Senzime AB is 1.19 times less risky than C Rad. It trades about -0.13 of its potential returns per unit of risk. C Rad AB is currently generating about -0.14 per unit of risk. If you would invest  684.00  in Senzime AB on October 7, 2024 and sell it today you would lose (117.00) from holding Senzime AB or give up 17.11% of portfolio value over 90 days.

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

Senzime AB  vs.  C Rad AB

Senzime AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senzime AB 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 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.

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 weak performance in the last few months, the Stock's basic 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.

Pair Trading with Senzime AB and C Rad

The main advantage of trading using opposite Senzime AB and C Rad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senzime AB 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 Senzime AB 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.