Correlation Between Ringkjoebing Landbobank and CBrain AS
Can any of the company-specific risk be diversified away by investing in both Ringkjoebing Landbobank and CBrain 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 Ringkjoebing Landbobank and CBrain AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ringkjoebing Landbobank AS and cBrain AS, you can compare the effects of market volatilities on Ringkjoebing Landbobank and CBrain 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 Ringkjoebing Landbobank with a short position of CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringkjoebing Landbobank and CBrain AS.
Diversification Opportunities for Ringkjoebing Landbobank and CBrain AS
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ringkjoebing and CBrain is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ringkjoebing Landbobank AS and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS and Ringkjoebing Landbobank 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 Ringkjoebing Landbobank AS are associated (or correlated) with CBrain AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cBrain AS has no effect on the direction of Ringkjoebing Landbobank i.e., Ringkjoebing Landbobank and CBrain AS go up and down completely randomly.
Pair Corralation between Ringkjoebing Landbobank and CBrain AS
Assuming the 90 days trading horizon Ringkjoebing Landbobank is expected to generate 1.18 times less return on investment than CBrain AS. But when comparing it to its historical volatility, Ringkjoebing Landbobank AS is 2.28 times less risky than CBrain AS. It trades about 0.05 of its potential returns per unit of risk. cBrain AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 18,012 in cBrain AS on September 3, 2024 and sell it today you would earn a total of 2,788 from holding cBrain AS or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ringkjoebing Landbobank AS vs. cBrain AS
Performance |
| Timeline |
| Ringkjoebing Landbobank |
| cBrain AS |
Ringkjoebing Landbobank and CBrain AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ringkjoebing Landbobank and CBrain AS
The main advantage of trading using opposite Ringkjoebing Landbobank and CBrain AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringkjoebing Landbobank position performs unexpectedly, CBrain 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 CBrain AS will offset losses from the drop in CBrain AS's long position.| Ringkjoebing Landbobank vs. Sydbank AS | Ringkjoebing Landbobank vs. Jyske Bank AS | Ringkjoebing Landbobank vs. Royal Unibrew AS | Ringkjoebing Landbobank vs. Spar Nord Bank |
| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma 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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