Correlation Between Rovsing AS and FOM Technologies
Can any of the company-specific risk be diversified away by investing in both Rovsing AS and FOM Technologies 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 Rovsing AS and FOM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rovsing AS and FOM Technologies AS, you can compare the effects of market volatilities on Rovsing AS and FOM Technologies 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 Rovsing AS with a short position of FOM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rovsing AS and FOM Technologies.
Diversification Opportunities for Rovsing AS and FOM Technologies
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rovsing and FOM is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rovsing AS and FOM Technologies AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOM Technologies and Rovsing AS 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 Rovsing AS are associated (or correlated) with FOM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOM Technologies has no effect on the direction of Rovsing AS i.e., Rovsing AS and FOM Technologies go up and down completely randomly.
Pair Corralation between Rovsing AS and FOM Technologies
Assuming the 90 days trading horizon Rovsing AS is expected to under-perform the FOM Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Rovsing AS is 1.5 times less risky than FOM Technologies. The stock trades about -0.32 of its potential returns per unit of risk. The FOM Technologies AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,055 in FOM Technologies AS on September 12, 2024 and sell it today you would lose (45.00) from holding FOM Technologies AS or give up 4.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rovsing AS vs. FOM Technologies AS
Performance |
| Timeline |
| Rovsing AS |
| FOM Technologies |
Rovsing AS and FOM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rovsing AS and FOM Technologies
The main advantage of trading using opposite Rovsing AS and FOM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rovsing AS position performs unexpectedly, FOM Technologies 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 FOM Technologies will offset losses from the drop in FOM Technologies' long position.| Rovsing AS vs. BioPorto | Rovsing AS vs. cBrain AS | Rovsing AS vs. Orphazyme AS | Rovsing AS vs. North Media AS |
| FOM Technologies vs. Vestas Wind Systems | FOM Technologies vs. Brd Klee AS | FOM Technologies vs. Hydract 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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