Correlation Between Newcap Holding and Scandinavian Brake
Can any of the company-specific risk be diversified away by investing in both Newcap Holding 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 Newcap Holding and Scandinavian Brake 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 Scandinavian Brake Systems, you can compare the effects of market volatilities on Newcap Holding 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 Newcap Holding with a short position of Scandinavian Brake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcap Holding and Scandinavian Brake.
Diversification Opportunities for Newcap Holding and Scandinavian Brake
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newcap and Scandinavian is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Newcap Holding AS and Scandinavian Brake Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Brake 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 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 Newcap Holding i.e., Newcap Holding and Scandinavian Brake go up and down completely randomly.
Pair Corralation between Newcap Holding and Scandinavian Brake
If you would invest 8.75 in Newcap Holding AS on October 26, 2024 and sell it today you would earn a total of 1.25 from holding Newcap Holding AS or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newcap Holding AS vs. Scandinavian Brake Systems
Performance |
| Timeline |
| Newcap Holding AS |
| Scandinavian Brake |
Newcap Holding and Scandinavian Brake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcap Holding and Scandinavian Brake
The main advantage of trading using opposite Newcap Holding and Scandinavian Brake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcap Holding 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.| Newcap Holding vs. SKAKO AS | Newcap Holding vs. Lollands Bank | Newcap Holding vs. Scandinavian Brake Systems | Newcap Holding vs. Rovsing 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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