Correlation Between Kreditbanken and Scandinavian Medical
Can any of the company-specific risk be diversified away by investing in both Kreditbanken and Scandinavian Medical 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 Kreditbanken and Scandinavian Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kreditbanken AS and Scandinavian Medical Solutions, you can compare the effects of market volatilities on Kreditbanken and Scandinavian Medical 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 Kreditbanken with a short position of Scandinavian Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kreditbanken and Scandinavian Medical.
Diversification Opportunities for Kreditbanken and Scandinavian Medical
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kreditbanken and Scandinavian is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kreditbanken AS and Scandinavian Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Medical and Kreditbanken 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 Kreditbanken AS are associated (or correlated) with Scandinavian Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Medical has no effect on the direction of Kreditbanken i.e., Kreditbanken and Scandinavian Medical go up and down completely randomly.
Pair Corralation between Kreditbanken and Scandinavian Medical
Assuming the 90 days trading horizon Kreditbanken AS is expected to under-perform the Scandinavian Medical. But the stock apears to be less risky and, when comparing its historical volatility, Kreditbanken AS is 3.0 times less risky than Scandinavian Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Scandinavian Medical Solutions is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Scandinavian Medical Solutions on August 29, 2024 and sell it today you would earn a total of 46.00 from holding Scandinavian Medical Solutions or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kreditbanken AS vs. Scandinavian Medical Solutions
Performance |
| Timeline |
| Kreditbanken AS |
| Scandinavian Medical |
Kreditbanken and Scandinavian Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kreditbanken and Scandinavian Medical
The main advantage of trading using opposite Kreditbanken and Scandinavian Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kreditbanken position performs unexpectedly, Scandinavian Medical 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 Scandinavian Medical will offset losses from the drop in Scandinavian Medical's long position.| Kreditbanken vs. Dataproces Group AS | Kreditbanken vs. cBrain AS | Kreditbanken vs. ALK Abell AS | Kreditbanken vs. ChemoMetec AS |
| Scandinavian Medical vs. MapsPeople AS | Scandinavian Medical vs. Penneo AS | Scandinavian Medical vs. Dataproces Group AS | Scandinavian Medical vs. Orderyoyo 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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