Correlation Between Lollands Bank and Broendbyernes
Can any of the company-specific risk be diversified away by investing in both Lollands Bank and Broendbyernes 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 Lollands Bank and Broendbyernes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lollands Bank and Broendbyernes IF Fodbold, you can compare the effects of market volatilities on Lollands Bank and Broendbyernes 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 Lollands Bank with a short position of Broendbyernes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lollands Bank and Broendbyernes.
Diversification Opportunities for Lollands Bank and Broendbyernes
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lollands and Broendbyernes is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lollands Bank and Broendbyernes IF Fodbold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broendbyernes IF Fodbold and Lollands 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 Lollands Bank are associated (or correlated) with Broendbyernes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broendbyernes IF Fodbold has no effect on the direction of Lollands Bank i.e., Lollands Bank and Broendbyernes go up and down completely randomly.
Pair Corralation between Lollands Bank and Broendbyernes
Assuming the 90 days trading horizon Lollands Bank is expected to generate 0.79 times more return on investment than Broendbyernes. However, Lollands Bank is 1.26 times less risky than Broendbyernes. It trades about 0.22 of its potential returns per unit of risk. Broendbyernes IF Fodbold is currently generating about 0.07 per unit of risk. If you would invest 63,000 in Lollands Bank on December 10, 2024 and sell it today you would earn a total of 5,500 from holding Lollands Bank or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lollands Bank vs. Broendbyernes IF Fodbold
Performance |
| Timeline |
| Lollands Bank |
| Broendbyernes IF Fodbold |
Lollands Bank and Broendbyernes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lollands Bank and Broendbyernes
The main advantage of trading using opposite Lollands Bank and Broendbyernes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lollands Bank position performs unexpectedly, Broendbyernes 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 Broendbyernes will offset losses from the drop in Broendbyernes' long position.| Lollands Bank vs. Skjern Bank AS | Lollands Bank vs. Kreditbanken AS | Lollands Bank vs. Djurslands Bank | Lollands Bank vs. Groenlandsbanken AS |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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