Correlation Between Matas AS and Broendbyernes
Can any of the company-specific risk be diversified away by investing in both Matas AS 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 Matas AS and Broendbyernes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matas AS and Broendbyernes IF Fodbold, you can compare the effects of market volatilities on Matas AS 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 Matas AS with a short position of Broendbyernes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matas AS and Broendbyernes.
Diversification Opportunities for Matas AS and Broendbyernes
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Matas and Broendbyernes is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS 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 Matas AS 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 Matas AS 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 Matas AS i.e., Matas AS and Broendbyernes go up and down completely randomly.
Pair Corralation between Matas AS and Broendbyernes
Assuming the 90 days trading horizon Matas AS is expected to generate 0.71 times more return on investment than Broendbyernes. However, Matas AS is 1.4 times less risky than Broendbyernes. It trades about 0.06 of its potential returns per unit of risk. Broendbyernes IF Fodbold is currently generating about 0.03 per unit of risk. If you would invest 8,579 in Matas AS on August 29, 2024 and sell it today you would earn a total of 3,941 from holding Matas AS or generate 45.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matas AS vs. Broendbyernes IF Fodbold
Performance |
| Timeline |
| Matas AS |
| Broendbyernes IF Fodbold |
Matas AS and Broendbyernes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matas AS and Broendbyernes
The main advantage of trading using opposite Matas AS and Broendbyernes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matas AS 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.The idea behind Matas AS and Broendbyernes IF Fodbold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Broendbyernes vs. Matas AS | Broendbyernes vs. cBrain AS | Broendbyernes vs. Alm Brand | Broendbyernes vs. Netcompany Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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