Correlation Between ROCKWOOL International and RIAS AS
Can any of the company-specific risk be diversified away by investing in both ROCKWOOL International and RIAS 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 ROCKWOOL International and RIAS AS 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 RIAS AS, you can compare the effects of market volatilities on ROCKWOOL International and RIAS 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 ROCKWOOL International with a short position of RIAS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROCKWOOL International and RIAS AS.
Diversification Opportunities for ROCKWOOL International and RIAS AS
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ROCKWOOL and RIAS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ROCKWOOL International AS and RIAS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RIAS AS 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 RIAS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RIAS AS has no effect on the direction of ROCKWOOL International i.e., ROCKWOOL International and RIAS AS go up and down completely randomly.
Pair Corralation between ROCKWOOL International and RIAS AS
Assuming the 90 days trading horizon ROCKWOOL International AS is expected to generate 0.77 times more return on investment than RIAS AS. However, ROCKWOOL International AS is 1.29 times less risky than RIAS AS. It trades about 0.04 of its potential returns per unit of risk. RIAS AS is currently generating about 0.01 per unit of risk. If you would invest 253,000 in ROCKWOOL International AS on November 2, 2024 and sell it today you would earn a total of 2,500 from holding ROCKWOOL International AS or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROCKWOOL International AS vs. RIAS AS
Performance |
| Timeline |
| ROCKWOOL International |
| RIAS AS |
ROCKWOOL International and RIAS AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROCKWOOL International and RIAS AS
The main advantage of trading using opposite ROCKWOOL International and RIAS AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROCKWOOL International position performs unexpectedly, RIAS 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 RIAS AS will offset losses from the drop in RIAS AS's 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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