Correlation Between SinterCast and Castellum

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

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

Diversification Opportunities for SinterCast and Castellum

0.8

Correlation Coefficient

SinterCast  Castellum

Very poor diversification

The 3 months correlation between SinterCast and Castellum is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SinterCast AB and Castellum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum AB and SinterCast 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 SinterCast AB are associated (or correlated) with Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum AB has no effect on the direction of SinterCast i.e., SinterCast and Castellum go up and down completely randomly.

Pair Corralation between SinterCast and Castellum

Assuming the 90 days trading horizon SinterCast AB is expected to generate 0.8 times more return on investment than Castellum. However, SinterCast AB is 1.25 times less risky than Castellum. It trades about 0.17 of its potential returns per unit of risk. Castellum AB is currently generating about 0.01 per unit of risk. If you would invest  10,037  in SinterCast AB on April 22, 2025 and sell it today you would earn a total of  1,463  from holding SinterCast AB or generate 14.58% return on investment over 90 days.

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

SinterCast AB  vs.  Castellum AB

SinterCast AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SinterCast AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SinterCast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Castellum AB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SinterCast and Castellum

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

The idea behind SinterCast AB and Castellum 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.