Correlation Between Ringkjoebing Landbobank and WindowMaster International
Can any of the company-specific risk be diversified away by investing in both Ringkjoebing Landbobank and WindowMaster 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 Ringkjoebing Landbobank and WindowMaster International 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 WindowMaster International AS, you can compare the effects of market volatilities on Ringkjoebing Landbobank and WindowMaster 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 Ringkjoebing Landbobank with a short position of WindowMaster International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringkjoebing Landbobank and WindowMaster International.
Diversification Opportunities for Ringkjoebing Landbobank and WindowMaster International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ringkjoebing and WindowMaster is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ringkjoebing Landbobank AS and WindowMaster International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WindowMaster International 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 WindowMaster International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WindowMaster International has no effect on the direction of Ringkjoebing Landbobank i.e., Ringkjoebing Landbobank and WindowMaster International go up and down completely randomly.
Pair Corralation between Ringkjoebing Landbobank and WindowMaster International
Assuming the 90 days trading horizon Ringkjoebing Landbobank is expected to generate 2.18 times less return on investment than WindowMaster International. But when comparing it to its historical volatility, Ringkjoebing Landbobank AS is 2.61 times less risky than WindowMaster International. It trades about 0.04 of its potential returns per unit of risk. WindowMaster International AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 520.00 in WindowMaster International AS on September 2, 2024 and sell it today you would earn a total of 146.00 from holding WindowMaster International AS or generate 28.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Ringkjoebing Landbobank AS vs. WindowMaster International AS
Performance |
| Timeline |
| Ringkjoebing Landbobank |
| WindowMaster International |
Ringkjoebing Landbobank and WindowMaster International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ringkjoebing Landbobank and WindowMaster International
The main advantage of trading using opposite Ringkjoebing Landbobank and WindowMaster International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringkjoebing Landbobank position performs unexpectedly, WindowMaster 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 WindowMaster International will offset losses from the drop in WindowMaster International's long position.| Ringkjoebing Landbobank vs. Sydbank AS | Ringkjoebing Landbobank vs. Jyske Bank AS | Ringkjoebing Landbobank vs. Alm Brand | Ringkjoebing Landbobank vs. Nordea Bank Abp |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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