Correlation Between ROMERIKE SPAREBANK and VERU INC
Can any of the company-specific risk be diversified away by investing in both ROMERIKE SPAREBANK and VERU INC 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 VERU INC 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 VERU INC DL 01, you can compare the effects of market volatilities on ROMERIKE SPAREBANK and VERU INC 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 VERU INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROMERIKE SPAREBANK and VERU INC.
Diversification Opportunities for ROMERIKE SPAREBANK and VERU INC
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ROMERIKE and VERU is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ROMERIKE SPAREBANK NK and VERU INC DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERU INC DL 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 VERU INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERU INC DL has no effect on the direction of ROMERIKE SPAREBANK i.e., ROMERIKE SPAREBANK and VERU INC go up and down completely randomly.
Pair Corralation between ROMERIKE SPAREBANK and VERU INC
Assuming the 90 days horizon ROMERIKE SPAREBANK NK is expected to generate 4.25 times more return on investment than VERU INC. However, ROMERIKE SPAREBANK is 4.25 times more volatile than VERU INC DL 01. It trades about 0.04 of its potential returns per unit of risk. VERU INC DL 01 is currently generating about -0.03 per unit of risk. If you would invest 1,112 in ROMERIKE SPAREBANK NK on October 13, 2024 and sell it today you would lose (49.00) from holding ROMERIKE SPAREBANK NK or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
ROMERIKE SPAREBANK NK vs. VERU INC DL 01
Performance |
| Timeline |
| ROMERIKE SPAREBANK |
| VERU INC DL |
ROMERIKE SPAREBANK and VERU INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROMERIKE SPAREBANK and VERU INC
The main advantage of trading using opposite ROMERIKE SPAREBANK and VERU INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROMERIKE SPAREBANK position performs unexpectedly, VERU INC 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 VERU INC will offset losses from the drop in VERU INC's long position.| ROMERIKE SPAREBANK vs. Eurasia Mining Plc | ROMERIKE SPAREBANK vs. AEGEAN AIRLINES | ROMERIKE SPAREBANK vs. G III Apparel Group | ROMERIKE SPAREBANK vs. SINGAPORE AIRLINES |
| VERU INC vs. Gruppo Mutuionline SpA | VERU INC vs. Lamar Advertising | VERU INC vs. SERI INDUSTRIAL EO | VERU INC vs. Salesforce |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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