Correlation Between AIR PRODCHEMICALS and ROMERIKE SPAREBANK
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and ROMERIKE SPAREBANK 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 AIR PRODCHEMICALS and ROMERIKE SPAREBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and ROMERIKE SPAREBANK NK, you can compare the effects of market volatilities on AIR PRODCHEMICALS and ROMERIKE SPAREBANK 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 AIR PRODCHEMICALS with a short position of ROMERIKE SPAREBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and ROMERIKE SPAREBANK.
Diversification Opportunities for AIR PRODCHEMICALS and ROMERIKE SPAREBANK
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIR and ROMERIKE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and ROMERIKE SPAREBANK NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROMERIKE SPAREBANK and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS are associated (or correlated) with ROMERIKE SPAREBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROMERIKE SPAREBANK has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and ROMERIKE SPAREBANK go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and ROMERIKE SPAREBANK
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 16.01 times less return on investment than ROMERIKE SPAREBANK. But when comparing it to its historical volatility, AIR PRODCHEMICALS is 21.88 times less risky than ROMERIKE SPAREBANK. It trades about 0.07 of its potential returns per unit of risk. ROMERIKE SPAREBANK NK is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 964.00 in ROMERIKE SPAREBANK NK on September 3, 2024 and sell it today you would earn a total of 106.00 from holding ROMERIKE SPAREBANK NK or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. ROMERIKE SPAREBANK NK
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| ROMERIKE SPAREBANK |
AIR PRODCHEMICALS and ROMERIKE SPAREBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and ROMERIKE SPAREBANK
The main advantage of trading using opposite AIR PRODCHEMICALS and ROMERIKE SPAREBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK will offset losses from the drop in ROMERIKE SPAREBANK's long position.| AIR PRODCHEMICALS vs. Tsingtao Brewery | AIR PRODCHEMICALS vs. Broadwind | AIR PRODCHEMICALS vs. National Beverage Corp | AIR PRODCHEMICALS vs. United Breweries Co |
| ROMERIKE SPAREBANK vs. VIAPLAY GROUP AB | ROMERIKE SPAREBANK vs. Thai Beverage Public | ROMERIKE SPAREBANK vs. Fevertree Drinks PLC | ROMERIKE SPAREBANK vs. China Resources Beer |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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