Correlation Between Jeudan and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Jeudan and Strategic Investments 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 Jeudan and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeudan and Strategic Investments AS, you can compare the effects of market volatilities on Jeudan and Strategic Investments 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 Jeudan with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeudan and Strategic Investments.
Diversification Opportunities for Jeudan and Strategic Investments
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jeudan and Strategic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jeudan and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and Jeudan 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 Jeudan are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Jeudan i.e., Jeudan and Strategic Investments go up and down completely randomly.
Pair Corralation between Jeudan and Strategic Investments
Assuming the 90 days trading horizon Jeudan is expected to under-perform the Strategic Investments. But the stock apears to be less risky and, when comparing its historical volatility, Jeudan is 1.46 times less risky than Strategic Investments. The stock trades about -0.34 of its potential returns per unit of risk. The Strategic Investments AS is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Strategic Investments AS on August 31, 2024 and sell it today you would lose (4.00) from holding Strategic Investments AS or give up 3.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeudan vs. Strategic Investments AS
Performance |
| Timeline |
| Jeudan |
| Strategic Investments |
Jeudan and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeudan and Strategic Investments
The main advantage of trading using opposite Jeudan and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeudan position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.The idea behind Jeudan and Strategic Investments AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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