Correlation Between Alefarm Brewing and Scandinavian Investment
Can any of the company-specific risk be diversified away by investing in both Alefarm Brewing and Scandinavian Investment 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 Alefarm Brewing and Scandinavian Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alefarm Brewing AS and Scandinavian Investment Group, you can compare the effects of market volatilities on Alefarm Brewing and Scandinavian Investment 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 Alefarm Brewing with a short position of Scandinavian Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alefarm Brewing and Scandinavian Investment.
Diversification Opportunities for Alefarm Brewing and Scandinavian Investment
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alefarm and Scandinavian is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Alefarm Brewing AS and Scandinavian Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Investment and Alefarm Brewing 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 Alefarm Brewing AS are associated (or correlated) with Scandinavian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Investment has no effect on the direction of Alefarm Brewing i.e., Alefarm Brewing and Scandinavian Investment go up and down completely randomly.
Pair Corralation between Alefarm Brewing and Scandinavian Investment
Assuming the 90 days trading horizon Alefarm Brewing AS is expected to generate 2.18 times more return on investment than Scandinavian Investment. However, Alefarm Brewing is 2.18 times more volatile than Scandinavian Investment Group. It trades about 0.08 of its potential returns per unit of risk. Scandinavian Investment Group is currently generating about -0.02 per unit of risk. If you would invest 131.00 in Alefarm Brewing AS on November 3, 2024 and sell it today you would earn a total of 7.00 from holding Alefarm Brewing AS or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alefarm Brewing AS vs. Scandinavian Investment Group
Performance |
| Timeline |
| Alefarm Brewing AS |
| Scandinavian Investment |
Alefarm Brewing and Scandinavian Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alefarm Brewing and Scandinavian Investment
The main advantage of trading using opposite Alefarm Brewing and Scandinavian Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alefarm Brewing position performs unexpectedly, Scandinavian Investment 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 Scandinavian Investment will offset losses from the drop in Scandinavian Investment's long position.| Alefarm Brewing vs. North Media AS | Alefarm Brewing vs. Carnegie Wealth Management | Alefarm Brewing vs. Nordfyns Bank AS | Alefarm Brewing vs. Kreditbanken AS |
| Scandinavian Investment vs. North Media AS | Scandinavian Investment vs. Rovsing AS | Scandinavian Investment vs. Alm Brand | Scandinavian Investment vs. SKAKO 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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