Correlation Between Aalborg Boldspilklub and SKAKO AS
Can any of the company-specific risk be diversified away by investing in both Aalborg Boldspilklub and SKAKO AS 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 Aalborg Boldspilklub and SKAKO AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aalborg Boldspilklub AS and SKAKO AS, you can compare the effects of market volatilities on Aalborg Boldspilklub and SKAKO AS 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 Aalborg Boldspilklub with a short position of SKAKO AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aalborg Boldspilklub and SKAKO AS.
Diversification Opportunities for Aalborg Boldspilklub and SKAKO AS
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aalborg and SKAKO is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aalborg Boldspilklub AS and SKAKO AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAKO AS and Aalborg Boldspilklub 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 Aalborg Boldspilklub AS are associated (or correlated) with SKAKO AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAKO AS has no effect on the direction of Aalborg Boldspilklub i.e., Aalborg Boldspilklub and SKAKO AS go up and down completely randomly.
Pair Corralation between Aalborg Boldspilklub and SKAKO AS
Assuming the 90 days trading horizon Aalborg Boldspilklub AS is expected to generate 1.42 times more return on investment than SKAKO AS. However, Aalborg Boldspilklub is 1.42 times more volatile than SKAKO AS. It trades about -0.05 of its potential returns per unit of risk. SKAKO AS is currently generating about -0.11 per unit of risk. If you would invest 3,580 in Aalborg Boldspilklub AS on September 19, 2024 and sell it today you would lose (140.00) from holding Aalborg Boldspilklub AS or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aalborg Boldspilklub AS vs. SKAKO AS
Performance |
| Timeline |
| Aalborg Boldspilklub |
| SKAKO AS |
Aalborg Boldspilklub and SKAKO AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aalborg Boldspilklub and SKAKO AS
The main advantage of trading using opposite Aalborg Boldspilklub and SKAKO AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalborg Boldspilklub position performs unexpectedly, SKAKO AS 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 SKAKO AS will offset losses from the drop in SKAKO AS's long position.| Aalborg Boldspilklub vs. ISS AS | Aalborg Boldspilklub vs. FLSmidth Co | Aalborg Boldspilklub vs. NKT AS | Aalborg Boldspilklub vs. Ambu 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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