Correlation Between Castellum and NCC AB

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

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

Diversification Opportunities for Castellum and NCC AB

0.2

Correlation Coefficient

Castellum  NCC AB

Modest diversification

The 3 months correlation between Castellum and NCC is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Castellum AB and NCC AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCC AB and Castellum 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 Castellum AB are associated (or correlated) with NCC AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCC AB has no effect on the direction of Castellum i.e., Castellum and NCC AB go up and down completely randomly.

Pair Corralation between Castellum and NCC AB

Assuming the 90 days trading horizon Castellum AB is expected to under-perform the NCC AB. In addition to that, Castellum is 1.2 times more volatile than NCC AB. It trades about -0.14 of its total potential returns per unit of risk. NCC AB is currently generating about 0.05 per unit of volatility. If you would invest  16,400  in NCC AB on September 12, 2024 and sell it today you would earn a total of  150.00  from holding NCC AB or generate 0.91% return on investment over 90 days.

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

Castellum AB  vs.  NCC AB

Castellum AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castellum 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NCC AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NCC AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NCC AB may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Castellum and NCC AB

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

The idea behind Castellum AB and NCC 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.