Correlation Between Nilfisk Holding and SKAKO AS
Can any of the company-specific risk be diversified away by investing in both Nilfisk Holding and SKAKO 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 Nilfisk Holding and SKAKO AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nilfisk Holding AS and SKAKO AS, you can compare the effects of market volatilities on Nilfisk Holding and SKAKO 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 Nilfisk Holding with a short position of SKAKO AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nilfisk Holding and SKAKO AS.
Diversification Opportunities for Nilfisk Holding and SKAKO AS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nilfisk and SKAKO is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nilfisk Holding AS and SKAKO AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAKO AS and Nilfisk 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 Nilfisk Holding AS are associated (or correlated) with SKAKO AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAKO AS has no effect on the direction of Nilfisk Holding i.e., Nilfisk Holding and SKAKO AS go up and down completely randomly.
Pair Corralation between Nilfisk Holding and SKAKO AS
Assuming the 90 days trading horizon Nilfisk Holding AS is expected to under-perform the SKAKO AS. But the stock apears to be less risky and, when comparing its historical volatility, Nilfisk Holding AS is 1.15 times less risky than SKAKO AS. The stock trades about -0.02 of its potential returns per unit of risk. The SKAKO AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,751 in SKAKO AS on September 3, 2024 and sell it today you would earn a total of 3,909 from holding SKAKO AS or generate 104.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nilfisk Holding AS vs. SKAKO AS
Performance |
| Timeline |
| Nilfisk Holding AS |
| SKAKO AS |
Nilfisk Holding and SKAKO AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nilfisk Holding and SKAKO AS
The main advantage of trading using opposite Nilfisk Holding and SKAKO AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nilfisk Holding position performs unexpectedly, SKAKO 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 SKAKO AS will offset losses from the drop in SKAKO AS's long position.| Nilfisk Holding vs. NKT AS | Nilfisk Holding vs. ISS AS | Nilfisk Holding vs. Demant AS | Nilfisk Holding vs. Matas 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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