Correlation Between Prime Office and Scandinavian Investment
Can any of the company-specific risk be diversified away by investing in both Prime Office and Scandinavian Investment 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 Prime Office and Scandinavian Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Office AS and Scandinavian Investment Group, you can compare the effects of market volatilities on Prime Office and Scandinavian Investment 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 Prime Office with a short position of Scandinavian Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Office and Scandinavian Investment.
Diversification Opportunities for Prime Office and Scandinavian Investment
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Prime and Scandinavian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Prime Office AS and Scandinavian Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Investment and Prime Office 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 Prime Office AS are associated (or correlated) with Scandinavian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Investment has no effect on the direction of Prime Office i.e., Prime Office and Scandinavian Investment go up and down completely randomly.
Pair Corralation between Prime Office and Scandinavian Investment
Assuming the 90 days trading horizon Prime Office AS is expected to under-perform the Scandinavian Investment. In addition to that, Prime Office is 1.71 times more volatile than Scandinavian Investment Group. It trades about -0.03 of its total potential returns per unit of risk. Scandinavian Investment Group is currently generating about 0.19 per unit of volatility. If you would invest 322.00 in Scandinavian Investment Group on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Scandinavian Investment Group or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Office AS vs. Scandinavian Investment Group
Performance |
| Timeline |
| Prime Office AS |
| Scandinavian Investment |
Prime Office and Scandinavian Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Office and Scandinavian Investment
The main advantage of trading using opposite Prime Office and Scandinavian Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Office position performs unexpectedly, Scandinavian Investment 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 Investment will offset losses from the drop in Scandinavian Investment's long position.| Prime Office vs. BioPorto | Prime Office vs. Newcap Holding AS | Prime Office vs. Agat Ejendomme AS | Prime Office vs. PF Atlantic Petroleum |
| Scandinavian Investment vs. North Media AS | Scandinavian Investment vs. Rovsing AS | Scandinavian Investment vs. Alm Brand | Scandinavian Investment vs. SKAKO 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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