Correlation Between Newcap Holding and Columbus
Can any of the company-specific risk be diversified away by investing in both Newcap Holding and Columbus 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 Newcap Holding and Columbus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcap Holding AS and Columbus AS, you can compare the effects of market volatilities on Newcap Holding and Columbus 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 Newcap Holding with a short position of Columbus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcap Holding and Columbus.
Diversification Opportunities for Newcap Holding and Columbus
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Newcap and Columbus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Newcap Holding AS and Columbus AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus AS and Newcap Holding 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 Newcap Holding AS are associated (or correlated) with Columbus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus AS has no effect on the direction of Newcap Holding i.e., Newcap Holding and Columbus go up and down completely randomly.
Pair Corralation between Newcap Holding and Columbus
Assuming the 90 days trading horizon Newcap Holding is expected to generate 1.37 times less return on investment than Columbus. In addition to that, Newcap Holding is 1.98 times more volatile than Columbus AS. It trades about 0.03 of its total potential returns per unit of risk. Columbus AS is currently generating about 0.09 per unit of volatility. If you would invest 1,075 in Columbus AS on October 26, 2024 and sell it today you would earn a total of 115.00 from holding Columbus AS or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newcap Holding AS vs. Columbus AS
Performance |
| Timeline |
| Newcap Holding AS |
| Columbus AS |
Newcap Holding and Columbus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcap Holding and Columbus
The main advantage of trading using opposite Newcap Holding and Columbus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcap Holding position performs unexpectedly, Columbus 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 Columbus will offset losses from the drop in Columbus' long position.| Newcap Holding vs. SKAKO AS | Newcap Holding vs. Lollands Bank | Newcap Holding vs. Scandinavian Brake Systems | Newcap Holding 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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