Correlation Between Alm Brand and SKAKO AS
Can any of the company-specific risk be diversified away by investing in both Alm Brand 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 Alm Brand and SKAKO AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alm Brand and SKAKO AS, you can compare the effects of market volatilities on Alm Brand 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 Alm Brand with a short position of SKAKO AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alm Brand and SKAKO AS.
Diversification Opportunities for Alm Brand and SKAKO AS
Modest diversification
The 3 months correlation between Alm and SKAKO is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand and SKAKO AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAKO AS and Alm Brand 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 Alm Brand 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 Alm Brand i.e., Alm Brand and SKAKO AS go up and down completely randomly.
Pair Corralation between Alm Brand and SKAKO AS
Assuming the 90 days trading horizon Alm Brand is expected to generate 0.43 times more return on investment than SKAKO AS. However, Alm Brand is 2.33 times less risky than SKAKO AS. It trades about 0.04 of its potential returns per unit of risk. SKAKO AS is currently generating about -0.14 per unit of risk. If you would invest 1,343 in Alm Brand on August 25, 2024 and sell it today you would earn a total of 11.00 from holding Alm Brand or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alm Brand vs. SKAKO AS
Performance |
| Timeline |
| Alm Brand |
| SKAKO AS |
Alm Brand and SKAKO AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alm Brand and SKAKO AS
The main advantage of trading using opposite Alm Brand and SKAKO AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alm Brand 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.The idea behind Alm Brand and SKAKO AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SKAKO AS vs. North Media AS | SKAKO AS vs. HH International AS | SKAKO AS vs. Per Aarsleff Holding | SKAKO AS vs. First Farms 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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