Correlation Between Castellum and Skane Mollan

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

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

Diversification Opportunities for Castellum and Skane Mollan

0.41

Correlation Coefficient

Castellum  Skane Mollan

Very weak diversification

The 3 months correlation between Castellum and Skane is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Castellum AB and Skane mollan AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skane mollan 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 Skane Mollan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skane mollan AB has no effect on the direction of Castellum i.e., Castellum and Skane Mollan go up and down completely randomly.

Pair Corralation between Castellum and Skane Mollan

Assuming the 90 days trading horizon Castellum AB is expected to generate 0.45 times more return on investment than Skane Mollan. However, Castellum AB is 2.22 times less risky than Skane Mollan. It trades about -0.03 of its potential returns per unit of risk. Skane mollan AB is currently generating about -0.03 per unit of risk. If you would invest  14,270  in Castellum AB on September 13, 2024 and sell it today you would lose (1,780) from holding Castellum AB or give up 12.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Castellum AB  vs.  Skane mollan 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 uncertain 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.

Skane mollan AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skane mollan AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Skane Mollan 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 Castellum and Skane Mollan

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

The idea behind Castellum AB and Skane mollan 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..