Correlation Between Fynske Bank and Erria AS
Can any of the company-specific risk be diversified away by investing in both Fynske Bank and Erria 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 Fynske Bank and Erria AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fynske Bank AS and Erria AS, you can compare the effects of market volatilities on Fynske Bank and Erria 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 Fynske Bank with a short position of Erria AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fynske Bank and Erria AS.
Diversification Opportunities for Fynske Bank and Erria AS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fynske and Erria is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fynske Bank AS and Erria AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erria AS and Fynske Bank 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 Fynske Bank AS are associated (or correlated) with Erria AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erria AS has no effect on the direction of Fynske Bank i.e., Fynske Bank and Erria AS go up and down completely randomly.
Pair Corralation between Fynske Bank and Erria AS
Assuming the 90 days trading horizon Fynske Bank is expected to generate 2.34 times less return on investment than Erria AS. But when comparing it to its historical volatility, Fynske Bank AS is 4.6 times less risky than Erria AS. It trades about 0.11 of its potential returns per unit of risk. Erria AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Erria AS on October 24, 2024 and sell it today you would earn a total of 10.00 from holding Erria AS or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fynske Bank AS vs. Erria AS
Performance |
| Timeline |
| Fynske Bank AS |
| Erria AS |
Fynske Bank and Erria AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fynske Bank and Erria AS
The main advantage of trading using opposite Fynske Bank and Erria AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fynske Bank position performs unexpectedly, Erria 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 Erria AS will offset losses from the drop in Erria AS's long position.| Fynske Bank vs. Skjern Bank AS | Fynske Bank vs. Djurslands Bank | Fynske Bank vs. Sparekassen Sjaelland Fyn AS | Fynske Bank vs. Groenlandsbanken AS |
| Erria AS vs. Fynske Bank AS | Erria AS vs. Groenlandsbanken AS | Erria AS vs. Moens Bank AS | Erria AS vs. North Media 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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