Correlation Between Ringkjoebing Landbobank and Nordfyns Bank
Can any of the company-specific risk be diversified away by investing in both Ringkjoebing Landbobank and Nordfyns Bank 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 Nordfyns Bank 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 Nordfyns Bank AS, you can compare the effects of market volatilities on Ringkjoebing Landbobank and Nordfyns Bank 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 Nordfyns Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringkjoebing Landbobank and Nordfyns Bank.
Diversification Opportunities for Ringkjoebing Landbobank and Nordfyns Bank
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ringkjoebing and Nordfyns is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ringkjoebing Landbobank AS and Nordfyns Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordfyns Bank 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 Nordfyns Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordfyns Bank AS has no effect on the direction of Ringkjoebing Landbobank i.e., Ringkjoebing Landbobank and Nordfyns Bank go up and down completely randomly.
Pair Corralation between Ringkjoebing Landbobank and Nordfyns Bank
Assuming the 90 days trading horizon Ringkjoebing Landbobank AS is expected to generate 1.38 times more return on investment than Nordfyns Bank. However, Ringkjoebing Landbobank is 1.38 times more volatile than Nordfyns Bank AS. It trades about 0.1 of its potential returns per unit of risk. Nordfyns Bank AS is currently generating about -0.5 per unit of risk. If you would invest 112,900 in Ringkjoebing Landbobank AS on September 1, 2024 and sell it today you would earn a total of 2,100 from holding Ringkjoebing Landbobank AS or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ringkjoebing Landbobank AS vs. Nordfyns Bank AS
Performance |
| Timeline |
| Ringkjoebing Landbobank |
| Nordfyns Bank AS |
Ringkjoebing Landbobank and Nordfyns Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ringkjoebing Landbobank and Nordfyns Bank
The main advantage of trading using opposite Ringkjoebing Landbobank and Nordfyns Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringkjoebing Landbobank position performs unexpectedly, Nordfyns Bank 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 Nordfyns Bank will offset losses from the drop in Nordfyns Bank'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 |
| Nordfyns Bank vs. Skjern Bank AS | Nordfyns Bank vs. Lollands Bank | Nordfyns Bank vs. Djurslands Bank | Nordfyns Bank vs. Moens 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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