Correlation Between Verusa Holding and Creditwest Faktoring

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

By analyzing existing cross correlation between Verusa Holding AS and Creditwest Faktoring AS, you can compare the effects of market volatilities on Verusa Holding and Creditwest Faktoring 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 Verusa Holding with a short position of Creditwest Faktoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verusa Holding and Creditwest Faktoring.

Diversification Opportunities for Verusa Holding and Creditwest Faktoring

-0.35

Correlation Coefficient

Verusa Holding  Creditwest Faktoring

Very good diversification

The 3 months correlation between Verusa and Creditwest is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Verusa Holding AS and Creditwest Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creditwest Faktoring and Verusa Holding 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 Verusa Holding AS are associated (or correlated) with Creditwest Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creditwest Faktoring has no effect on the direction of Verusa Holding i.e., Verusa Holding and Creditwest Faktoring go up and down completely randomly.

Pair Corralation between Verusa Holding and Creditwest Faktoring

Assuming the 90 days trading horizon Verusa Holding is expected to generate 33.21 times less return on investment than Creditwest Faktoring. But when comparing it to its historical volatility, Verusa Holding AS is 1.24 times less risky than Creditwest Faktoring. It trades about 0.0 of its potential returns per unit of risk. Creditwest Faktoring AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  537.00  in Creditwest Faktoring AS on October 6, 2024 and sell it today you would earn a total of  71.00  from holding Creditwest Faktoring AS or generate 13.22% return on investment over 90 days.

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

Verusa Holding AS  vs.  Creditwest Faktoring AS

Verusa Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verusa Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Verusa Holding is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Creditwest Faktoring

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Creditwest Faktoring demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Verusa Holding and Creditwest Faktoring

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

The idea behind Verusa Holding AS and Creditwest Faktoring AS 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.