Correlation Between Lollands Bank and Formuepleje Limittellus
Can any of the company-specific risk be diversified away by investing in both Lollands Bank and Formuepleje Limittellus 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 Formuepleje Limittellus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lollands Bank and Formuepleje Limittellus, you can compare the effects of market volatilities on Lollands Bank and Formuepleje Limittellus 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 Formuepleje Limittellus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lollands Bank and Formuepleje Limittellus.
Diversification Opportunities for Lollands Bank and Formuepleje Limittellus
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lollands and Formuepleje is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lollands Bank and Formuepleje Limittellus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formuepleje Limittellus 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 Formuepleje Limittellus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formuepleje Limittellus has no effect on the direction of Lollands Bank i.e., Lollands Bank and Formuepleje Limittellus go up and down completely randomly.
Pair Corralation between Lollands Bank and Formuepleje Limittellus
Assuming the 90 days trading horizon Lollands Bank is expected to under-perform the Formuepleje Limittellus. In addition to that, Lollands Bank is 1.89 times more volatile than Formuepleje Limittellus. It trades about -0.03 of its total potential returns per unit of risk. Formuepleje Limittellus is currently generating about 0.09 per unit of volatility. If you would invest 26,979 in Formuepleje Limittellus on September 3, 2024 and sell it today you would earn a total of 2,428 from holding Formuepleje Limittellus or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lollands Bank vs. Formuepleje Limittellus
Performance |
| Timeline |
| Lollands Bank |
| Formuepleje Limittellus |
Lollands Bank and Formuepleje Limittellus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lollands Bank and Formuepleje Limittellus
The main advantage of trading using opposite Lollands Bank and Formuepleje Limittellus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lollands Bank position performs unexpectedly, Formuepleje Limittellus 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 Formuepleje Limittellus will offset losses from the drop in Formuepleje Limittellus' long position.| Lollands Bank vs. Skjern Bank AS | Lollands Bank vs. Kreditbanken AS | Lollands Bank vs. Djurslands Bank | Lollands Bank vs. Groenlandsbanken AS |
| Formuepleje Limittellus vs. Nordinvestments AS | Formuepleje Limittellus vs. Scandinavian Tobacco Group | Formuepleje Limittellus vs. Alefarm Brewing AS | Formuepleje Limittellus vs. Lollands Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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