Correlation Between Creditwest Faktoring and Pergamon Status

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

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

Diversification Opportunities for Creditwest Faktoring and Pergamon Status

0.25

Correlation Coefficient

Creditwest Faktoring  Pergamon Status

Modest diversification

The 3 months correlation between Creditwest and Pergamon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Creditwest Faktoring AS and Pergamon Status Dis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pergamon Status Dis and Creditwest Faktoring 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 Creditwest Faktoring AS are associated (or correlated) with Pergamon Status. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pergamon Status Dis has no effect on the direction of Creditwest Faktoring i.e., Creditwest Faktoring and Pergamon Status go up and down completely randomly.

Pair Corralation between Creditwest Faktoring and Pergamon Status

Assuming the 90 days trading horizon Creditwest Faktoring is expected to generate 4.79 times less return on investment than Pergamon Status. In addition to that, Creditwest Faktoring is 1.07 times more volatile than Pergamon Status Dis. It trades about 0.03 of its total potential returns per unit of risk. Pergamon Status Dis is currently generating about 0.17 per unit of volatility. If you would invest  7,860  in Pergamon Status Dis on February 17, 2024 and sell it today you would earn a total of  4,440  from holding Pergamon Status Dis or generate 56.49% return on investment over 90 days.

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

Creditwest Faktoring AS  vs.  Pergamon Status Dis

Creditwest Faktoring

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Creditwest Faktoring may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pergamon Status Dis

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pergamon Status Dis are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Pergamon Status demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creditwest Faktoring and Pergamon Status

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

The idea behind Creditwest Faktoring AS and Pergamon Status Dis 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.