Correlation Between Coloplast A/S and LABOCANNA

Can any of the company-specific risk be diversified away by investing in both Coloplast A/S and LABOCANNA 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 Coloplast A/S and LABOCANNA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coloplast AS and LABOCANNA SA ZY 10, you can compare the effects of market volatilities on Coloplast A/S and LABOCANNA 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 Coloplast A/S with a short position of LABOCANNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast A/S and LABOCANNA.

Diversification Opportunities for Coloplast A/S and LABOCANNA

-0.07

Correlation Coefficient

Coloplast A/S  LABOCANNA

Good diversification

The 3 months correlation between Coloplast and LABOCANNA is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast AS and LABOCANNA SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LABOCANNA SA ZY and Coloplast A/S 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 Coloplast AS are associated (or correlated) with LABOCANNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LABOCANNA SA ZY has no effect on the direction of Coloplast A/S i.e., Coloplast A/S and LABOCANNA go up and down completely randomly.

Pair Corralation between Coloplast A/S and LABOCANNA

Assuming the 90 days trading horizon Coloplast AS is expected to under-perform the LABOCANNA. But the stock apears to be less risky and, when comparing its historical volatility, Coloplast AS is 2.41 times less risky than LABOCANNA. The stock trades about -0.14 of its potential returns per unit of risk. The LABOCANNA SA ZY 10 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  6.20  in LABOCANNA SA ZY 10 on January 18, 2025 and sell it today you would lose (0.04) from holding LABOCANNA SA ZY 10 or give up 0.65% of portfolio value over 90 days.

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

Coloplast AS  vs.  LABOCANNA SA ZY 10

Coloplast A/S

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coloplast AS 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 fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

LABOCANNA SA ZY

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LABOCANNA SA ZY 10 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, LABOCANNA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Coloplast A/S and LABOCANNA

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

The idea behind Coloplast AS and LABOCANNA SA ZY 10 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.