Correlation Between Brd Klee and ROCKWOOL International
Can any of the company-specific risk be diversified away by investing in both Brd Klee and ROCKWOOL International 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 Brd Klee and ROCKWOOL International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brd Klee AS and ROCKWOOL International AS, you can compare the effects of market volatilities on Brd Klee and ROCKWOOL International 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 Brd Klee with a short position of ROCKWOOL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brd Klee and ROCKWOOL International.
Diversification Opportunities for Brd Klee and ROCKWOOL International
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brd and ROCKWOOL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Brd Klee AS and ROCKWOOL International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROCKWOOL International and Brd Klee 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 Brd Klee AS are associated (or correlated) with ROCKWOOL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROCKWOOL International has no effect on the direction of Brd Klee i.e., Brd Klee and ROCKWOOL International go up and down completely randomly.
Pair Corralation between Brd Klee and ROCKWOOL International
Assuming the 90 days trading horizon Brd Klee AS is expected to generate 0.55 times more return on investment than ROCKWOOL International. However, Brd Klee AS is 1.82 times less risky than ROCKWOOL International. It trades about 0.01 of its potential returns per unit of risk. ROCKWOOL International AS is currently generating about -0.18 per unit of risk. If you would invest 384,000 in Brd Klee AS on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Brd Klee AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Brd Klee AS vs. ROCKWOOL International AS
Performance |
| Timeline |
| Brd Klee AS |
| ROCKWOOL International |
Brd Klee and ROCKWOOL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brd Klee and ROCKWOOL International
The main advantage of trading using opposite Brd Klee and ROCKWOOL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brd Klee position performs unexpectedly, ROCKWOOL International 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 ROCKWOOL International will offset losses from the drop in ROCKWOOL International's long position.| Brd Klee vs. RIAS AS | Brd Klee vs. Investeringsselskabet Luxor AS | Brd Klee vs. Glunz Jensen | Brd Klee vs. SKAKO AS |
| ROCKWOOL International vs. ROCKWOOL International AS | ROCKWOOL International vs. FLSmidth Co | ROCKWOOL International vs. Royal Unibrew AS | ROCKWOOL International vs. Tryg 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 Stocks Directory module to find actively traded stocks across global markets.
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