Correlation Between Scandinavian Brake and Hvidbjerg Bank
Can any of the company-specific risk be diversified away by investing in both Scandinavian Brake and Hvidbjerg 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 Scandinavian Brake and Hvidbjerg Bank 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 Hvidbjerg Bank, you can compare the effects of market volatilities on Scandinavian Brake and Hvidbjerg 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 Scandinavian Brake with a short position of Hvidbjerg Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Brake and Hvidbjerg Bank.
Diversification Opportunities for Scandinavian Brake and Hvidbjerg Bank
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scandinavian and Hvidbjerg is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Brake Systems and Hvidbjerg Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hvidbjerg Bank 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 Hvidbjerg Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hvidbjerg Bank has no effect on the direction of Scandinavian Brake i.e., Scandinavian Brake and Hvidbjerg Bank go up and down completely randomly.
Pair Corralation between Scandinavian Brake and Hvidbjerg Bank
Assuming the 90 days trading horizon Scandinavian Brake is expected to generate 2.58 times less return on investment than Hvidbjerg Bank. In addition to that, Scandinavian Brake is 2.32 times more volatile than Hvidbjerg Bank. It trades about 0.01 of its total potential returns per unit of risk. Hvidbjerg Bank is currently generating about 0.04 per unit of volatility. If you would invest 10,700 in Hvidbjerg Bank on November 1, 2024 and sell it today you would earn a total of 2,800 from holding Hvidbjerg Bank or generate 26.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Brake Systems vs. Hvidbjerg Bank
Performance |
| Timeline |
| Scandinavian Brake |
| Hvidbjerg Bank |
Scandinavian Brake and Hvidbjerg Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Brake and Hvidbjerg Bank
The main advantage of trading using opposite Scandinavian Brake and Hvidbjerg Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Brake position performs unexpectedly, Hvidbjerg 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 Hvidbjerg Bank will offset losses from the drop in Hvidbjerg Bank's long position.| Scandinavian Brake vs. SKAKO AS | Scandinavian Brake vs. Newcap Holding AS | Scandinavian Brake vs. Columbus AS | Scandinavian Brake vs. Rovsing AS |
| Hvidbjerg Bank vs. Skjern Bank AS | Hvidbjerg Bank vs. Lollands Bank | Hvidbjerg Bank vs. Djurslands Bank | Hvidbjerg Bank vs. Nordfyns Bank 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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