Correlation Between Camurus AB and ALM Equity

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

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

Diversification Opportunities for Camurus AB and ALM Equity

-0.34

Correlation Coefficient

Camurus AB  ALM Equity

Very good diversification

The 3 months correlation between Camurus and ALM is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Camurus AB and ALM Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Equity AB and Camurus AB 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 Camurus AB are associated (or correlated) with ALM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Equity AB has no effect on the direction of Camurus AB i.e., Camurus AB and ALM Equity go up and down completely randomly.

Pair Corralation between Camurus AB and ALM Equity

Assuming the 90 days trading horizon Camurus AB is expected to generate 2.83 times more return on investment than ALM Equity. However, Camurus AB is 2.83 times more volatile than ALM Equity AB. It trades about 0.2 of its potential returns per unit of risk. ALM Equity AB is currently generating about 0.01 per unit of risk. If you would invest  60,300  in Camurus AB on June 16, 2025 and sell it today you would earn a total of  12,850  from holding Camurus AB or generate 21.31% return on investment over 90 days.

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

Camurus AB  vs.  ALM Equity AB

Camurus AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Camurus AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Camurus AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

ALM Equity AB

Risk-Adjusted Performance

Weakest

Over the last 90 days ALM Equity AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ALM Equity is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Camurus AB and ALM Equity

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

The idea behind Camurus AB and ALM Equity 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.