Correlation Between Royal Unibrew and ROCKWOOL International
Can any of the company-specific risk be diversified away by investing in both Royal Unibrew and ROCKWOOL International 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 Royal Unibrew and ROCKWOOL International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Unibrew AS and ROCKWOOL International AS, you can compare the effects of market volatilities on Royal Unibrew and ROCKWOOL International 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 Royal Unibrew with a short position of ROCKWOOL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Unibrew and ROCKWOOL International.
Diversification Opportunities for Royal Unibrew and ROCKWOOL International
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Royal and ROCKWOOL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Royal Unibrew AS and ROCKWOOL International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROCKWOOL International and Royal Unibrew 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 Royal Unibrew AS are associated (or correlated) with ROCKWOOL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROCKWOOL International has no effect on the direction of Royal Unibrew i.e., Royal Unibrew and ROCKWOOL International go up and down completely randomly.
Pair Corralation between Royal Unibrew and ROCKWOOL International
Assuming the 90 days trading horizon Royal Unibrew AS is expected to generate 0.4 times more return on investment than ROCKWOOL International. However, Royal Unibrew AS is 2.52 times less risky than ROCKWOOL International. It trades about 0.38 of its potential returns per unit of risk. ROCKWOOL International AS is currently generating about 0.09 per unit of risk. If you would invest 48,740 in Royal Unibrew AS on November 27, 2024 and sell it today you would earn a total of 6,410 from holding Royal Unibrew AS or generate 13.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Unibrew AS vs. ROCKWOOL International AS
Performance |
| Timeline |
| Royal Unibrew AS |
| ROCKWOOL International |
Royal Unibrew and ROCKWOOL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Unibrew and ROCKWOOL International
The main advantage of trading using opposite Royal Unibrew and ROCKWOOL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Unibrew position performs unexpectedly, ROCKWOOL International 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 ROCKWOOL International will offset losses from the drop in ROCKWOOL International's long position.| Royal Unibrew vs. ROCKWOOL International AS | Royal Unibrew vs. Tryg AS | Royal Unibrew vs. DSV Panalpina AS | Royal Unibrew vs. GN Store Nord |
| ROCKWOOL International vs. ROCKWOOL International AS | ROCKWOOL International vs. FLSmidth Co | ROCKWOOL International vs. Royal Unibrew AS | ROCKWOOL International vs. Tryg 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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