Correlation Between Rovsing AS and Lollands Bank
Can any of the company-specific risk be diversified away by investing in both Rovsing AS and Lollands Bank 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 Lollands Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rovsing AS and Lollands Bank, you can compare the effects of market volatilities on Rovsing AS and Lollands Bank 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 Lollands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rovsing AS and Lollands Bank.
Diversification Opportunities for Rovsing AS and Lollands Bank
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rovsing and Lollands is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Rovsing AS and Lollands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lollands Bank 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 Lollands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lollands Bank has no effect on the direction of Rovsing AS i.e., Rovsing AS and Lollands Bank go up and down completely randomly.
Pair Corralation between Rovsing AS and Lollands Bank
Assuming the 90 days trading horizon Rovsing AS is expected to generate 2.47 times more return on investment than Lollands Bank. However, Rovsing AS is 2.47 times more volatile than Lollands Bank. It trades about 0.0 of its potential returns per unit of risk. Lollands Bank is currently generating about 0.0 per unit of risk. If you would invest 5,100 in Rovsing AS on August 29, 2024 and sell it today you would lose (1,020) from holding Rovsing AS or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rovsing AS vs. Lollands Bank
Performance |
| Timeline |
| Rovsing AS |
| Lollands Bank |
Rovsing AS and Lollands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rovsing AS and Lollands Bank
The main advantage of trading using opposite Rovsing AS and Lollands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rovsing AS position performs unexpectedly, Lollands Bank 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 Lollands Bank will offset losses from the drop in Lollands Bank's long position.| Rovsing AS vs. BioPorto | Rovsing AS vs. cBrain AS | Rovsing AS vs. Orphazyme AS | Rovsing AS vs. North Media AS |
| Lollands Bank vs. Dataproces Group AS | Lollands Bank vs. cBrain AS | Lollands Bank vs. ALK Abell AS | Lollands Bank vs. ChemoMetec 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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