Correlation Between ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ, you can compare the effects of market volatilities on ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT.
Diversification Opportunities for ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between ROMERIKE and REMEDY is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ROMERIKE SPAREBANK NK and REMEDY ENTERTAINMENT OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMEDY ENTERTAINMENT OYJ has no effect on the direction of ROMERIKE SPAREBANK i.e., ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT go up and down completely randomly.
Pair Corralation between ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT
Assuming the 90 days horizon ROMERIKE SPAREBANK NK is expected to generate 0.47 times more return on investment than REMEDY ENTERTAINMENT. However, ROMERIKE SPAREBANK NK is 2.13 times less risky than REMEDY ENTERTAINMENT. It trades about 0.26 of its potential returns per unit of risk. REMEDY ENTERTAINMENT OYJ is currently generating about -0.21 per unit of risk. If you would invest 1,078 in ROMERIKE SPAREBANK NK on November 5, 2024 and sell it today you would earn a total of 52.00 from holding ROMERIKE SPAREBANK NK or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROMERIKE SPAREBANK NK vs. REMEDY ENTERTAINMENT OYJ
Performance |
| Timeline |
| ROMERIKE SPAREBANK |
| REMEDY ENTERTAINMENT OYJ |
ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT
The main advantage of trading using opposite ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROMERIKE SPAREBANK position performs unexpectedly, REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT will offset losses from the drop in REMEDY ENTERTAINMENT's long position.| ROMERIKE SPAREBANK vs. Verizon Communications | ROMERIKE SPAREBANK vs. Ribbon Communications | ROMERIKE SPAREBANK vs. Fukuyama Transporting Co | ROMERIKE SPAREBANK vs. DICKS Sporting Goods |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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