Correlation Between Ringkjoebing Landbobank and Konsolidator
Can any of the company-specific risk be diversified away by investing in both Ringkjoebing Landbobank and Konsolidator 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 Konsolidator 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 Konsolidator AS, you can compare the effects of market volatilities on Ringkjoebing Landbobank and Konsolidator 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 Konsolidator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringkjoebing Landbobank and Konsolidator.
Diversification Opportunities for Ringkjoebing Landbobank and Konsolidator
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ringkjoebing and Konsolidator is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ringkjoebing Landbobank AS and Konsolidator AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konsolidator 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 Konsolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konsolidator AS has no effect on the direction of Ringkjoebing Landbobank i.e., Ringkjoebing Landbobank and Konsolidator go up and down completely randomly.
Pair Corralation between Ringkjoebing Landbobank and Konsolidator
Assuming the 90 days trading horizon Ringkjoebing Landbobank is expected to generate 1.22 times less return on investment than Konsolidator. But when comparing it to its historical volatility, Ringkjoebing Landbobank AS is 2.09 times less risky than Konsolidator. It trades about 0.1 of its potential returns per unit of risk. Konsolidator AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 382.00 in Konsolidator AS on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Konsolidator AS or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ringkjoebing Landbobank AS vs. Konsolidator AS
Performance |
| Timeline |
| Ringkjoebing Landbobank |
| Konsolidator AS |
Ringkjoebing Landbobank and Konsolidator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ringkjoebing Landbobank and Konsolidator
The main advantage of trading using opposite Ringkjoebing Landbobank and Konsolidator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringkjoebing Landbobank position performs unexpectedly, Konsolidator 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 Konsolidator will offset losses from the drop in Konsolidator'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 |
| Konsolidator vs. Penneo AS | Konsolidator vs. FOM Technologies AS | Konsolidator vs. Shape Robotics AS | Konsolidator vs. Danske Invest |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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