Correlation Between ROMERIKE SPAREBANK and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both ROMERIKE SPAREBANK and ADRIATIC METALS 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 ROMERIKE SPAREBANK and ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ROMERIKE SPAREBANK NK and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on ROMERIKE SPAREBANK and ADRIATIC METALS 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 ROMERIKE SPAREBANK with a short position of ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROMERIKE SPAREBANK and ADRIATIC METALS.
Diversification Opportunities for ROMERIKE SPAREBANK and ADRIATIC METALS
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ROMERIKE and ADRIATIC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ROMERIKE SPAREBANK NK and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS and ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK NK are associated (or correlated) with ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of ROMERIKE SPAREBANK i.e., ROMERIKE SPAREBANK and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between ROMERIKE SPAREBANK and ADRIATIC METALS
Assuming the 90 days horizon ROMERIKE SPAREBANK NK is expected to generate 0.3 times more return on investment than ADRIATIC METALS. However, ROMERIKE SPAREBANK NK is 3.33 times less risky than ADRIATIC METALS. It trades about 0.29 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about 0.02 per unit of risk. If you would invest 1,012 in ROMERIKE SPAREBANK NK on September 3, 2024 and sell it today you would earn a total of 59.00 from holding ROMERIKE SPAREBANK NK or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROMERIKE SPAREBANK NK vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| ROMERIKE SPAREBANK |
| ADRIATIC METALS LS |
ROMERIKE SPAREBANK and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROMERIKE SPAREBANK and ADRIATIC METALS
The main advantage of trading using opposite ROMERIKE SPAREBANK and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROMERIKE SPAREBANK position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| ROMERIKE SPAREBANK vs. VIAPLAY GROUP AB | ROMERIKE SPAREBANK vs. Thai Beverage Public | ROMERIKE SPAREBANK vs. Fevertree Drinks PLC | ROMERIKE SPAREBANK vs. China Resources Beer |
| ADRIATIC METALS vs. MOLSON RS BEVERAGE | ADRIATIC METALS vs. China Resources Beer | ADRIATIC METALS vs. Suntory Beverage Food | ADRIATIC METALS vs. Fevertree Drinks PLC |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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