Correlation Between Schouw and Roblon AS
Can any of the company-specific risk be diversified away by investing in both Schouw and Roblon AS 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 Schouw and Roblon AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schouw Co and Roblon AS, you can compare the effects of market volatilities on Schouw and Roblon AS 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 Schouw with a short position of Roblon AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schouw and Roblon AS.
Diversification Opportunities for Schouw and Roblon AS
Excellent diversification
The 3 months correlation between Schouw and Roblon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Schouw Co and Roblon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roblon AS and Schouw 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 Schouw Co are associated (or correlated) with Roblon AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roblon AS has no effect on the direction of Schouw i.e., Schouw and Roblon AS go up and down completely randomly.
Pair Corralation between Schouw and Roblon AS
Assuming the 90 days trading horizon Schouw Co is expected to under-perform the Roblon AS. But the stock apears to be less risky and, when comparing its historical volatility, Schouw Co is 1.49 times less risky than Roblon AS. The stock trades about -0.06 of its potential returns per unit of risk. The Roblon AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,600 in Roblon AS on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Roblon AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Schouw Co vs. Roblon AS
Performance |
| Timeline |
| Schouw |
| Roblon AS |
Schouw and Roblon AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schouw and Roblon AS
The main advantage of trading using opposite Schouw and Roblon AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schouw position performs unexpectedly, Roblon AS 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 Roblon AS will offset losses from the drop in Roblon AS's long position.| Schouw vs. ROCKWOOL International AS | Schouw vs. Tryg AS | Schouw vs. DSV Panalpina AS | Schouw vs. GN Store Nord |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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