Correlation Between 5BARz International and Calliditas Therapeutics

Can any of the company-specific risk be diversified away by investing in both 5BARz International and Calliditas Therapeutics 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 5BARz International and Calliditas Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 5BARz International and Calliditas Therapeutics, you can compare the effects of market volatilities on 5BARz International and Calliditas Therapeutics 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 5BARz International with a short position of Calliditas Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5BARz International and Calliditas Therapeutics.

Diversification Opportunities for 5BARz International and Calliditas Therapeutics

0.0

Correlation Coefficient

5BARz International  Calliditas Therapeutics

Pay attention - limited upside

The 3 months correlation between 5BARz and Calliditas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 5BARz International and Calliditas Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calliditas Therapeutics and 5BARz International 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 5BARz International are associated (or correlated) with Calliditas Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calliditas Therapeutics has no effect on the direction of 5BARz International i.e., 5BARz International and Calliditas Therapeutics go up and down completely randomly.

Pair Corralation between 5BARz International and Calliditas Therapeutics

If you would invest  1,589  in Calliditas Therapeutics on February 5, 2024 and sell it today you would earn a total of  411.00  from holding Calliditas Therapeutics or generate 25.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

5BARz International  vs.  Calliditas Therapeutics

5BARz International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 5BARz International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, 5BARz International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Calliditas Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with 5BARz International and Calliditas Therapeutics

The main advantage of trading using opposite 5BARz International and Calliditas Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5BARz International position performs unexpectedly, Calliditas Therapeutics 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 Calliditas Therapeutics will offset losses from the drop in Calliditas Therapeutics' long position.

The idea behind 5BARz International and Calliditas Therapeutics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.