Correlation Between Lollands Bank and Scandinavian Brake
Can any of the company-specific risk be diversified away by investing in both Lollands Bank and Scandinavian Brake 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 Scandinavian Brake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lollands Bank and Scandinavian Brake Systems, you can compare the effects of market volatilities on Lollands Bank and Scandinavian Brake 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 Scandinavian Brake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lollands Bank and Scandinavian Brake.
Diversification Opportunities for Lollands Bank and Scandinavian Brake
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lollands and Scandinavian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lollands Bank and Scandinavian Brake Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Brake 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 Scandinavian Brake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Brake has no effect on the direction of Lollands Bank i.e., Lollands Bank and Scandinavian Brake go up and down completely randomly.
Pair Corralation between Lollands Bank and Scandinavian Brake
If you would invest 59,000 in Lollands Bank on October 26, 2024 and sell it today you would earn a total of 500.00 from holding Lollands Bank or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lollands Bank vs. Scandinavian Brake Systems
Performance |
| Timeline |
| Lollands Bank |
| Scandinavian Brake |
Lollands Bank and Scandinavian Brake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lollands Bank and Scandinavian Brake
The main advantage of trading using opposite Lollands Bank and Scandinavian Brake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lollands Bank position performs unexpectedly, Scandinavian Brake 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 Brake will offset losses from the drop in Scandinavian Brake's long position.| Lollands Bank vs. Skjern Bank AS | Lollands Bank vs. Kreditbanken AS | Lollands Bank vs. Djurslands Bank | Lollands Bank vs. Groenlandsbanken AS |
| Scandinavian Brake vs. SKAKO AS | Scandinavian Brake vs. Newcap Holding AS | Scandinavian Brake vs. Columbus AS | Scandinavian Brake 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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