Correlation Between Newcap Holding and Rovsing AS
Can any of the company-specific risk be diversified away by investing in both Newcap Holding and Rovsing AS 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 Rovsing AS 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 Rovsing AS, you can compare the effects of market volatilities on Newcap Holding and Rovsing AS 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 Rovsing AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcap Holding and Rovsing AS.
Diversification Opportunities for Newcap Holding and Rovsing AS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Newcap and Rovsing is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Newcap Holding AS and Rovsing AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rovsing 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 Rovsing AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rovsing AS has no effect on the direction of Newcap Holding i.e., Newcap Holding and Rovsing AS go up and down completely randomly.
Pair Corralation between Newcap Holding and Rovsing AS
Assuming the 90 days trading horizon Newcap Holding AS is expected to generate 1.51 times more return on investment than Rovsing AS. However, Newcap Holding is 1.51 times more volatile than Rovsing AS. It trades about 0.03 of its potential returns per unit of risk. Rovsing AS is currently generating about -0.1 per unit of risk. If you would invest 9.70 in Newcap Holding AS on October 26, 2024 and sell it today you would earn a total of 0.30 from holding Newcap Holding AS or generate 3.09% 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. Rovsing AS
Performance |
| Timeline |
| Newcap Holding AS |
| Rovsing AS |
Newcap Holding and Rovsing AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcap Holding and Rovsing AS
The main advantage of trading using opposite Newcap Holding and Rovsing AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcap Holding position performs unexpectedly, Rovsing AS 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 Rovsing AS will offset losses from the drop in Rovsing AS's long position.| Newcap Holding vs. SKAKO AS | Newcap Holding vs. Lollands Bank | Newcap Holding vs. Scandinavian Brake Systems | Newcap Holding vs. Rovsing AS |
| Rovsing AS vs. BioPorto | Rovsing AS vs. cBrain AS | Rovsing AS vs. North Media AS | Rovsing AS vs. Zealand Pharma 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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