Correlation Between Scandinavian Investment and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both Scandinavian Investment and BankInvest Optima 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 Investment and BankInvest Optima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Investment Group and BankInvest Optima 30, you can compare the effects of market volatilities on Scandinavian Investment and BankInvest Optima 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 Investment with a short position of BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Investment and BankInvest Optima.
Diversification Opportunities for Scandinavian Investment and BankInvest Optima
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Scandinavian and BankInvest is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Investment Group and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima and Scandinavian Investment 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 Investment Group are associated (or correlated) with BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Scandinavian Investment i.e., Scandinavian Investment and BankInvest Optima go up and down completely randomly.
Pair Corralation between Scandinavian Investment and BankInvest Optima
Assuming the 90 days trading horizon Scandinavian Investment Group is expected to under-perform the BankInvest Optima. In addition to that, Scandinavian Investment is 5.75 times more volatile than BankInvest Optima 30. It trades about -0.03 of its total potential returns per unit of risk. BankInvest Optima 30 is currently generating about 0.01 per unit of volatility. If you would invest 12,390 in BankInvest Optima 30 on November 1, 2024 and sell it today you would earn a total of 10.00 from holding BankInvest Optima 30 or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Investment Group vs. BankInvest Optima 30
Performance |
| Timeline |
| Scandinavian Investment |
| BankInvest Optima |
Scandinavian Investment and BankInvest Optima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Investment and BankInvest Optima
The main advantage of trading using opposite Scandinavian Investment and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Investment position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima's long position.| Scandinavian Investment vs. North Media AS | Scandinavian Investment vs. Rovsing AS | Scandinavian Investment vs. Alm Brand | Scandinavian Investment vs. SKAKO AS |
| BankInvest Optima vs. Netcompany Group AS | BankInvest Optima vs. cBrain AS | BankInvest Optima vs. ALK Abell AS | BankInvest Optima vs. Green Hydrogen Systems |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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