Correlation Between Roblon AS and First Farms
Can any of the company-specific risk be diversified away by investing in both Roblon AS and First Farms 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 Roblon AS and First Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roblon AS and First Farms AS, you can compare the effects of market volatilities on Roblon AS and First Farms 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 Roblon AS with a short position of First Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roblon AS and First Farms.
Diversification Opportunities for Roblon AS and First Farms
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roblon and First is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Roblon AS and First Farms AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Farms AS and Roblon AS 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 Roblon AS are associated (or correlated) with First Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Farms AS has no effect on the direction of Roblon AS i.e., Roblon AS and First Farms go up and down completely randomly.
Pair Corralation between Roblon AS and First Farms
Assuming the 90 days trading horizon Roblon AS is expected to generate 1.24 times more return on investment than First Farms. However, Roblon AS is 1.24 times more volatile than First Farms AS. It trades about 0.01 of its potential returns per unit of risk. First Farms AS is currently generating about -0.14 per unit of risk. If you would invest 9,600 in Roblon AS on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Roblon AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Roblon AS vs. First Farms AS
Performance |
| Timeline |
| Roblon AS |
| First Farms AS |
Roblon AS and First Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roblon AS and First Farms
The main advantage of trading using opposite Roblon AS and First Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roblon AS position performs unexpectedly, First Farms 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 First Farms will offset losses from the drop in First Farms' long position.The idea behind Roblon AS and First Farms AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| First Farms vs. HH International AS | First Farms vs. SKAKO AS | First Farms vs. Spar Nord Bank | First Farms 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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