Correlation Between Ringkjoebing Landbobank and Erria AS
Can any of the company-specific risk be diversified away by investing in both Ringkjoebing Landbobank and Erria 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 Erria 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 Erria AS, you can compare the effects of market volatilities on Ringkjoebing Landbobank and Erria 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 Erria AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringkjoebing Landbobank and Erria AS.
Diversification Opportunities for Ringkjoebing Landbobank and Erria AS
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ringkjoebing and Erria is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ringkjoebing Landbobank AS and Erria AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erria 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 Erria AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erria AS has no effect on the direction of Ringkjoebing Landbobank i.e., Ringkjoebing Landbobank and Erria AS go up and down completely randomly.
Pair Corralation between Ringkjoebing Landbobank and Erria AS
Assuming the 90 days trading horizon Ringkjoebing Landbobank AS is expected to generate 0.43 times more return on investment than Erria AS. However, Ringkjoebing Landbobank AS is 2.33 times less risky than Erria AS. It trades about 0.08 of its potential returns per unit of risk. Erria AS is currently generating about -0.01 per unit of risk. If you would invest 93,694 in Ringkjoebing Landbobank AS on September 4, 2024 and sell it today you would earn a total of 24,306 from holding Ringkjoebing Landbobank AS or generate 25.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ringkjoebing Landbobank AS vs. Erria AS
Performance |
| Timeline |
| Ringkjoebing Landbobank |
| Erria AS |
Ringkjoebing Landbobank and Erria AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ringkjoebing Landbobank and Erria AS
The main advantage of trading using opposite Ringkjoebing Landbobank and Erria AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringkjoebing Landbobank position performs unexpectedly, Erria 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 Erria AS will offset losses from the drop in Erria AS's long position.| Ringkjoebing Landbobank vs. FLSmidth Co | Ringkjoebing Landbobank vs. Danske Bank AS | Ringkjoebing Landbobank vs. ISS AS | Ringkjoebing Landbobank vs. DSV Panalpina AS |
| Erria AS vs. Strategic Investments AS | Erria AS vs. Scandinavian Medical Solutions | Erria AS vs. Scandinavian Tobacco Group | Erria AS vs. Vestjysk Bank 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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