Correlation Between ROMERIKE SPAREBANK and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both ROMERIKE SPAREBANK and ArcelorMittal 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 ArcelorMittal 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 ArcelorMittal, you can compare the effects of market volatilities on ROMERIKE SPAREBANK and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROMERIKE SPAREBANK and ArcelorMittal.
Diversification Opportunities for ROMERIKE SPAREBANK and ArcelorMittal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ROMERIKE and ArcelorMittal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ROMERIKE SPAREBANK NK and ArcelorMittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal has no effect on the direction of ROMERIKE SPAREBANK i.e., ROMERIKE SPAREBANK and ArcelorMittal go up and down completely randomly.
Pair Corralation between ROMERIKE SPAREBANK and ArcelorMittal
Assuming the 90 days horizon ROMERIKE SPAREBANK NK is expected to generate 0.41 times more return on investment than ArcelorMittal. However, ROMERIKE SPAREBANK NK is 2.47 times less risky than ArcelorMittal. It trades about 0.23 of its potential returns per unit of risk. ArcelorMittal is currently generating about 0.06 per unit of risk. If you would invest 1,018 in ROMERIKE SPAREBANK NK on August 31, 2024 and sell it today you would earn a total of 49.00 from holding ROMERIKE SPAREBANK NK or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ROMERIKE SPAREBANK NK vs. ArcelorMittal
Performance |
| Timeline |
| ROMERIKE SPAREBANK |
| ArcelorMittal |
ROMERIKE SPAREBANK and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROMERIKE SPAREBANK and ArcelorMittal
The main advantage of trading using opposite ROMERIKE SPAREBANK and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROMERIKE SPAREBANK position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| ROMERIKE SPAREBANK vs. QUEEN S ROAD | ROMERIKE SPAREBANK vs. Laureate Education | ROMERIKE SPAREBANK vs. DeVry Education Group | ROMERIKE SPAREBANK vs. Liberty Broadband |
| ArcelorMittal vs. Gaztransport Technigaz SA | ArcelorMittal vs. Transportadora de Gas | ArcelorMittal vs. Broadcom | ArcelorMittal vs. Lion Biotechnologies |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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