Correlation Between EuropaCorp and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both EuropaCorp and Schibsted ASA 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 EuropaCorp and Schibsted ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EuropaCorp and Schibsted ASA A, you can compare the effects of market volatilities on EuropaCorp and Schibsted ASA 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 EuropaCorp with a short position of Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EuropaCorp and Schibsted ASA.
Diversification Opportunities for EuropaCorp and Schibsted ASA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EuropaCorp and Schibsted is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding EuropaCorp and Schibsted ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA A and EuropaCorp 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 EuropaCorp are associated (or correlated) with Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA A has no effect on the direction of EuropaCorp i.e., EuropaCorp and Schibsted ASA go up and down completely randomly.
Pair Corralation between EuropaCorp and Schibsted ASA
Assuming the 90 days horizon EuropaCorp is expected to generate 37.61 times less return on investment than Schibsted ASA. In addition to that, EuropaCorp is 1.28 times more volatile than Schibsted ASA A. It trades about 0.0 of its total potential returns per unit of risk. Schibsted ASA A is currently generating about 0.09 per unit of volatility. If you would invest 1,018 in Schibsted ASA A on September 3, 2024 and sell it today you would earn a total of 2,136 from holding Schibsted ASA A or generate 209.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EuropaCorp vs. Schibsted ASA A
Performance |
| Timeline |
| EuropaCorp |
| Schibsted ASA A |
EuropaCorp and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EuropaCorp and Schibsted ASA
The main advantage of trading using opposite EuropaCorp and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EuropaCorp position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| EuropaCorp vs. STMicroelectronics NV | EuropaCorp vs. AOI Electronics Co | EuropaCorp vs. Methode Electronics | EuropaCorp vs. UET United Electronic |
| Schibsted ASA vs. Superior Plus Corp | Schibsted ASA vs. NMI Holdings | Schibsted ASA vs. Origin Agritech | Schibsted ASA vs. SIVERS SEMICONDUCTORS AB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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