Correlation Between ROCKWOOL International and Dampskibsselskabet
Can any of the company-specific risk be diversified away by investing in both ROCKWOOL International and Dampskibsselskabet 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 Dampskibsselskabet 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 Dampskibsselskabet Norden AS, you can compare the effects of market volatilities on ROCKWOOL International and Dampskibsselskabet 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 Dampskibsselskabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROCKWOOL International and Dampskibsselskabet.
Diversification Opportunities for ROCKWOOL International and Dampskibsselskabet
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ROCKWOOL and Dampskibsselskabet is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ROCKWOOL International AS and Dampskibsselskabet Norden AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dampskibsselskabet 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 Dampskibsselskabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dampskibsselskabet has no effect on the direction of ROCKWOOL International i.e., ROCKWOOL International and Dampskibsselskabet go up and down completely randomly.
Pair Corralation between ROCKWOOL International and Dampskibsselskabet
Assuming the 90 days trading horizon ROCKWOOL International AS is expected to generate 0.88 times more return on investment than Dampskibsselskabet. However, ROCKWOOL International AS is 1.13 times less risky than Dampskibsselskabet. It trades about 0.05 of its potential returns per unit of risk. Dampskibsselskabet Norden AS is currently generating about -0.02 per unit of risk. If you would invest 180,684 in ROCKWOOL International AS on August 31, 2024 and sell it today you would earn a total of 88,116 from holding ROCKWOOL International AS or generate 48.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROCKWOOL International AS vs. Dampskibsselskabet Norden AS
Performance |
| Timeline |
| ROCKWOOL International |
| Dampskibsselskabet |
ROCKWOOL International and Dampskibsselskabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROCKWOOL International and Dampskibsselskabet
The main advantage of trading using opposite ROCKWOOL International and Dampskibsselskabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROCKWOOL International position performs unexpectedly, Dampskibsselskabet 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 Dampskibsselskabet will offset losses from the drop in Dampskibsselskabet's long position.| ROCKWOOL International vs. FLSmidth Co | ROCKWOOL International vs. GN Store Nord | ROCKWOOL International vs. Ambu AS | ROCKWOOL International vs. DSV Panalpina AS |
| Dampskibsselskabet vs. FLSmidth Co | Dampskibsselskabet vs. NKT AS | Dampskibsselskabet vs. GN Store Nord | Dampskibsselskabet vs. ROCKWOOL International 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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