Correlation Between SOEDER SPORTFISKE and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both SOEDER SPORTFISKE and KINGBOARD CHEMICAL 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 SOEDER SPORTFISKE and KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOEDER SPORTFISKE AB and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on SOEDER SPORTFISKE and KINGBOARD CHEMICAL 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 SOEDER SPORTFISKE with a short position of KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOEDER SPORTFISKE and KINGBOARD CHEMICAL.
Diversification Opportunities for SOEDER SPORTFISKE and KINGBOARD CHEMICAL
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SOEDER and KINGBOARD is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SOEDER SPORTFISKE AB and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL and SOEDER SPORTFISKE 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 SOEDER SPORTFISKE AB are associated (or correlated) with KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of SOEDER SPORTFISKE i.e., SOEDER SPORTFISKE and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between SOEDER SPORTFISKE and KINGBOARD CHEMICAL
Assuming the 90 days horizon SOEDER SPORTFISKE is expected to generate 2.52 times less return on investment than KINGBOARD CHEMICAL. But when comparing it to its historical volatility, SOEDER SPORTFISKE AB is 1.29 times less risky than KINGBOARD CHEMICAL. It trades about 0.15 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 224.00 in KINGBOARD CHEMICAL on October 22, 2024 and sell it today you would earn a total of 24.00 from holding KINGBOARD CHEMICAL or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
SOEDER SPORTFISKE AB vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| SOEDER SPORTFISKE |
| KINGBOARD CHEMICAL |
SOEDER SPORTFISKE and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOEDER SPORTFISKE and KINGBOARD CHEMICAL
The main advantage of trading using opposite SOEDER SPORTFISKE and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOEDER SPORTFISKE position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| SOEDER SPORTFISKE vs. Hanison Construction Holdings | SOEDER SPORTFISKE vs. Federal Agricultural Mortgage | SOEDER SPORTFISKE vs. Titan Machinery | SOEDER SPORTFISKE vs. Unity Software |
| KINGBOARD CHEMICAL vs. ASURE SOFTWARE | KINGBOARD CHEMICAL vs. Guidewire Software | KINGBOARD CHEMICAL vs. Alfa Financial Software | KINGBOARD CHEMICAL vs. SOEDER SPORTFISKE AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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