Correlation Between Broedrene and North Media
Can any of the company-specific risk be diversified away by investing in both Broedrene and North Media 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 Broedrene and North Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broedrene AO Johansen and North Media AS, you can compare the effects of market volatilities on Broedrene and North Media 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 Broedrene with a short position of North Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broedrene and North Media.
Diversification Opportunities for Broedrene and North Media
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broedrene and North is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Broedrene AO Johansen and North Media AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Media AS and Broedrene 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 Broedrene AO Johansen are associated (or correlated) with North Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Media AS has no effect on the direction of Broedrene i.e., Broedrene and North Media go up and down completely randomly.
Pair Corralation between Broedrene and North Media
Assuming the 90 days trading horizon Broedrene AO Johansen is expected to generate 1.27 times more return on investment than North Media. However, Broedrene is 1.27 times more volatile than North Media AS. It trades about -0.06 of its potential returns per unit of risk. North Media AS is currently generating about -0.25 per unit of risk. If you would invest 8,320 in Broedrene AO Johansen on August 29, 2024 and sell it today you would lose (190.00) from holding Broedrene AO Johansen or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broedrene AO Johansen vs. North Media AS
Performance |
| Timeline |
| Broedrene AO Johansen |
| North Media AS |
Broedrene and North Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broedrene and North Media
The main advantage of trading using opposite Broedrene and North Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broedrene position performs unexpectedly, North Media 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 North Media will offset losses from the drop in North Media's long position.| Broedrene vs. North Media AS | Broedrene vs. Solar AS | Broedrene vs. Per Aarsleff Holding | Broedrene vs. HusCompagniet AS |
| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group 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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