Correlation Between CSL and SCANDINAVCHEMOTECH

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

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

Diversification Opportunities for CSL and SCANDINAVCHEMOTECH

0.33

Correlation Coefficient

CSL  SCANDINAVCHEMOTECH

Weak diversification

The 3 months correlation between CSL and SCANDINAVCHEMOTECH is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and SCANDINAVCHEMOTECH CLB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDINAVCHEMOTECH CLB and CSL 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 CSL Limited are associated (or correlated) with SCANDINAVCHEMOTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDINAVCHEMOTECH CLB has no effect on the direction of CSL i.e., CSL and SCANDINAVCHEMOTECH go up and down completely randomly.

Pair Corralation between CSL and SCANDINAVCHEMOTECH

Assuming the 90 days horizon CSL is expected to generate 13.88 times less return on investment than SCANDINAVCHEMOTECH. But when comparing it to its historical volatility, CSL Limited is 10.17 times less risky than SCANDINAVCHEMOTECH. It trades about 0.08 of its potential returns per unit of risk. SCANDINAVCHEMOTECH CLB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8.52  in SCANDINAVCHEMOTECH CLB on April 22, 2025 and sell it today you would earn a total of  4.48  from holding SCANDINAVCHEMOTECH CLB or generate 52.58% return on investment over 90 days.

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

CSL Limited  vs.  SCANDINAVCHEMOTECH CLB

CSL Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSL Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SCANDINAVCHEMOTECH CLB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCANDINAVCHEMOTECH CLB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SCANDINAVCHEMOTECH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and SCANDINAVCHEMOTECH

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

The idea behind CSL Limited and SCANDINAVCHEMOTECH CLB 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.