Correlation Between Implantica and Clavister Holding

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

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

Diversification Opportunities for Implantica and Clavister Holding

-0.7

Correlation Coefficient

Implantica  Clavister Holding

Excellent diversification

The 3 months correlation between Implantica and Clavister is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Implantica AG and Clavister Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clavister Holding and Implantica 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 Implantica AG are associated (or correlated) with Clavister Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clavister Holding has no effect on the direction of Implantica i.e., Implantica and Clavister Holding go up and down completely randomly.

Pair Corralation between Implantica and Clavister Holding

Assuming the 90 days trading horizon Implantica AG is expected to under-perform the Clavister Holding. But the stock apears to be less risky and, when comparing its historical volatility, Implantica AG is 1.49 times less risky than Clavister Holding. The stock trades about -0.08 of its potential returns per unit of risk. The Clavister Holding AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Clavister Holding AB on September 14, 2024 and sell it today you would earn a total of  37.00  from holding Clavister Holding AB or generate 22.7% return on investment over 90 days.

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

Implantica AG  vs.  Clavister Holding AB

Implantica AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implantica AG 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.

Clavister Holding

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clavister Holding AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clavister Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Implantica and Clavister Holding

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

The idea behind Implantica AG and Clavister Holding 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.