Correlation Between ROCKWOOL International and Copenhagen Airports
Can any of the company-specific risk be diversified away by investing in both ROCKWOOL International and Copenhagen Airports 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 ROCKWOOL International and Copenhagen Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ROCKWOOL International AS and Copenhagen Airports AS, you can compare the effects of market volatilities on ROCKWOOL International and Copenhagen Airports 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 ROCKWOOL International with a short position of Copenhagen Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROCKWOOL International and Copenhagen Airports.
Diversification Opportunities for ROCKWOOL International and Copenhagen Airports
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ROCKWOOL and Copenhagen is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ROCKWOOL International AS and Copenhagen Airports AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copenhagen Airports and ROCKWOOL International 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 ROCKWOOL International AS are associated (or correlated) with Copenhagen Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copenhagen Airports has no effect on the direction of ROCKWOOL International i.e., ROCKWOOL International and Copenhagen Airports go up and down completely randomly.
Pair Corralation between ROCKWOOL International and Copenhagen Airports
Assuming the 90 days trading horizon ROCKWOOL International AS is expected to generate 1.19 times more return on investment than Copenhagen Airports. However, ROCKWOOL International is 1.19 times more volatile than Copenhagen Airports AS. It trades about -0.02 of its potential returns per unit of risk. Copenhagen Airports AS is currently generating about -0.11 per unit of risk. If you would invest 283,000 in ROCKWOOL International AS on September 3, 2024 and sell it today you would lose (23,000) from holding ROCKWOOL International AS or give up 8.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROCKWOOL International AS vs. Copenhagen Airports AS
Performance |
| Timeline |
| ROCKWOOL International |
| Copenhagen Airports |
ROCKWOOL International and Copenhagen Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROCKWOOL International and Copenhagen Airports
The main advantage of trading using opposite ROCKWOOL International and Copenhagen Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROCKWOOL International position performs unexpectedly, Copenhagen Airports 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 Copenhagen Airports will offset losses from the drop in Copenhagen Airports' long position.| ROCKWOOL International vs. ROCKWOOL International AS | ROCKWOOL International vs. FLSmidth Co | ROCKWOOL International vs. Royal Unibrew AS | ROCKWOOL International vs. Tryg 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |