Correlation Between ROMERIKE SPAREBANK and PT Ace
Can any of the company-specific risk be diversified away by investing in both ROMERIKE SPAREBANK and PT Ace 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 PT Ace 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 PT Ace Hardware, you can compare the effects of market volatilities on ROMERIKE SPAREBANK and PT Ace 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 PT Ace. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROMERIKE SPAREBANK and PT Ace.
Diversification Opportunities for ROMERIKE SPAREBANK and PT Ace
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ROMERIKE and 4AH1 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ROMERIKE SPAREBANK NK and PT Ace Hardware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Ace Hardware 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 PT Ace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Ace Hardware has no effect on the direction of ROMERIKE SPAREBANK i.e., ROMERIKE SPAREBANK and PT Ace go up and down completely randomly.
Pair Corralation between ROMERIKE SPAREBANK and PT Ace
Assuming the 90 days horizon ROMERIKE SPAREBANK NK is expected to generate 0.61 times more return on investment than PT Ace. However, ROMERIKE SPAREBANK NK is 1.63 times less risky than PT Ace. It trades about 0.07 of its potential returns per unit of risk. PT Ace Hardware is currently generating about -0.02 per unit of risk. If you would invest 1,060 in ROMERIKE SPAREBANK NK on September 15, 2024 and sell it today you would earn a total of 16.00 from holding ROMERIKE SPAREBANK NK or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROMERIKE SPAREBANK NK vs. PT Ace Hardware
Performance |
| Timeline |
| ROMERIKE SPAREBANK |
| PT Ace Hardware |
ROMERIKE SPAREBANK and PT Ace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROMERIKE SPAREBANK and PT Ace
The main advantage of trading using opposite ROMERIKE SPAREBANK and PT Ace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROMERIKE SPAREBANK position performs unexpectedly, PT Ace 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 PT Ace will offset losses from the drop in PT Ace's long position.| ROMERIKE SPAREBANK vs. POSBO UNSPADRS20YC1 | ROMERIKE SPAREBANK vs. Postal Savings Bank | ROMERIKE SPAREBANK vs. UTD OV BK LOC ADR1 | ROMERIKE SPAREBANK vs. Superior Plus Corp |
| PT Ace vs. Leggett Platt Incorporated | PT Ace vs. Superior Plus Corp | PT Ace vs. SIVERS SEMICONDUCTORS AB | PT Ace vs. NorAm Drilling AS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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