Correlation Between Moberg Pharma and Cantargia

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

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

Diversification Opportunities for Moberg Pharma and Cantargia

-0.54

Correlation Coefficient

Moberg Pharma  Cantargia

Excellent diversification

The 3 months correlation between Moberg and Cantargia is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Moberg Pharma AB and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB and Moberg Pharma 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 Moberg Pharma AB are associated (or correlated) with Cantargia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantargia AB has no effect on the direction of Moberg Pharma i.e., Moberg Pharma and Cantargia go up and down completely randomly.

Pair Corralation between Moberg Pharma and Cantargia

Assuming the 90 days trading horizon Moberg Pharma AB is expected to generate 1.19 times more return on investment than Cantargia. However, Moberg Pharma is 1.19 times more volatile than Cantargia AB. It trades about -0.01 of its potential returns per unit of risk. Cantargia AB is currently generating about -0.17 per unit of risk. If you would invest  1,123  in Moberg Pharma AB on September 13, 2024 and sell it today you would lose (223.00) from holding Moberg Pharma AB or give up 19.86% of portfolio value over 90 days.

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

Moberg Pharma AB  vs.  Cantargia AB

Moberg Pharma AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cantargia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantargia AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

Pair Trading with Moberg Pharma and Cantargia

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

The idea behind Moberg Pharma AB and Cantargia 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.