Correlation Between Checkin Group and Norion Bank
Can any of the company-specific risk be diversified away by investing in both Checkin Group and Norion Bank 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 Checkin Group and Norion Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Checkin Group AB and Norion Bank, you can compare the effects of market volatilities on Checkin Group and Norion Bank 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 Checkin Group with a short position of Norion Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Checkin Group and Norion Bank.
Diversification Opportunities for Checkin Group and Norion Bank
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Checkin and Norion is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Checkin Group AB and Norion Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norion Bank and Checkin Group 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 Checkin Group AB are associated (or correlated) with Norion Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norion Bank has no effect on the direction of Checkin Group i.e., Checkin Group and Norion Bank go up and down completely randomly.
Pair Corralation between Checkin Group and Norion Bank
Assuming the 90 days trading horizon Checkin Group AB is expected to generate 2.38 times more return on investment than Norion Bank. However, Checkin Group is 2.38 times more volatile than Norion Bank. It trades about 0.1 of its potential returns per unit of risk. Norion Bank is currently generating about -0.07 per unit of risk. If you would invest 1,535 in Checkin Group AB on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Checkin Group AB or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Checkin Group AB vs. Norion Bank
Performance |
| Timeline |
| Checkin Group AB |
| Norion Bank |
Checkin Group and Norion Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Checkin Group and Norion Bank
The main advantage of trading using opposite Checkin Group and Norion Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Checkin Group position performs unexpectedly, Norion Bank 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 Norion Bank will offset losses from the drop in Norion Bank's long position.| Checkin Group vs. Bambuser AB | Checkin Group vs. Cint Group AB | Checkin Group vs. Sinch AB | Checkin Group vs. Surgical Science Sweden |
| Norion Bank vs. AstraZeneca PLC | Norion Bank vs. Investor AB ser | Norion Bank vs. Investor AB ser | Norion Bank vs. Atlas Copco 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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