Correlation Between Scandinavian Brake and Broendbyernes
Can any of the company-specific risk be diversified away by investing in both Scandinavian Brake and Broendbyernes 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 Scandinavian Brake and Broendbyernes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Brake Systems and Broendbyernes IF Fodbold, you can compare the effects of market volatilities on Scandinavian Brake and Broendbyernes 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 Scandinavian Brake with a short position of Broendbyernes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Brake and Broendbyernes.
Diversification Opportunities for Scandinavian Brake and Broendbyernes
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scandinavian and Broendbyernes is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Brake Systems and Broendbyernes IF Fodbold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broendbyernes IF Fodbold and Scandinavian Brake 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 Scandinavian Brake Systems are associated (or correlated) with Broendbyernes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broendbyernes IF Fodbold has no effect on the direction of Scandinavian Brake i.e., Scandinavian Brake and Broendbyernes go up and down completely randomly.
Pair Corralation between Scandinavian Brake and Broendbyernes
Assuming the 90 days trading horizon Scandinavian Brake Systems is expected to generate 2.08 times more return on investment than Broendbyernes. However, Scandinavian Brake is 2.08 times more volatile than Broendbyernes IF Fodbold. It trades about 0.04 of its potential returns per unit of risk. Broendbyernes IF Fodbold is currently generating about 0.01 per unit of risk. If you would invest 670.00 in Scandinavian Brake Systems on August 29, 2024 and sell it today you would earn a total of 505.00 from holding Scandinavian Brake Systems or generate 75.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Brake Systems vs. Broendbyernes IF Fodbold
Performance |
| Timeline |
| Scandinavian Brake |
| Broendbyernes IF Fodbold |
Scandinavian Brake and Broendbyernes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Brake and Broendbyernes
The main advantage of trading using opposite Scandinavian Brake and Broendbyernes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Brake position performs unexpectedly, Broendbyernes 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 Broendbyernes will offset losses from the drop in Broendbyernes' long position.| Scandinavian Brake vs. Broendbyernes IF Fodbold | Scandinavian Brake vs. Matas AS | Scandinavian Brake vs. NKT AS | Scandinavian Brake vs. Jyske Bank AS |
| Broendbyernes vs. Matas AS | Broendbyernes vs. cBrain AS | Broendbyernes vs. Alm Brand | Broendbyernes vs. Netcompany Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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