Correlation Between ViroGates and CBrain AS

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

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

Diversification Opportunities for ViroGates and CBrain AS

0.01

Correlation Coefficient

ViroGates  CBrain AS

Significant diversification

The 3 months correlation between ViroGates and CBrain is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ViroGates AS and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS and ViroGates 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 ViroGates AS are associated (or correlated) with CBrain AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cBrain AS has no effect on the direction of ViroGates i.e., ViroGates and CBrain AS go up and down completely randomly.

Pair Corralation between ViroGates and CBrain AS

Assuming the 90 days trading horizon ViroGates AS is expected to generate 4.39 times more return on investment than CBrain AS. However, ViroGates is 4.39 times more volatile than cBrain AS. It trades about 0.17 of its potential returns per unit of risk. cBrain AS is currently generating about 0.06 per unit of risk. If you would invest  570.00  in ViroGates AS on September 4, 2024 and sell it today you would earn a total of  770.00  from holding ViroGates AS or generate 135.09% return on investment over 90 days.

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

ViroGates AS  vs.  cBrain AS

ViroGates AS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ViroGates AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ViroGates displayed solid returns over the last few months and may actually be approaching a breakup point.

cBrain AS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in cBrain AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, CBrain AS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ViroGates and CBrain AS

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

The idea behind ViroGates AS and cBrain 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.