Correlation Between Scandinavian Investment and Konsolidator
Can any of the company-specific risk be diversified away by investing in both Scandinavian Investment and Konsolidator 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 Konsolidator 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 Konsolidator AS, you can compare the effects of market volatilities on Scandinavian Investment and Konsolidator 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 Konsolidator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Investment and Konsolidator.
Diversification Opportunities for Scandinavian Investment and Konsolidator
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scandinavian and Konsolidator is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Investment Group and Konsolidator AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konsolidator AS 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 Konsolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konsolidator AS has no effect on the direction of Scandinavian Investment i.e., Scandinavian Investment and Konsolidator go up and down completely randomly.
Pair Corralation between Scandinavian Investment and Konsolidator
Assuming the 90 days trading horizon Scandinavian Investment Group is expected to under-perform the Konsolidator. But the stock apears to be less risky and, when comparing its historical volatility, Scandinavian Investment Group is 1.51 times less risky than Konsolidator. The stock trades about -0.04 of its potential returns per unit of risk. The Konsolidator AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Konsolidator AS on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Konsolidator AS or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Scandinavian Investment Group vs. Konsolidator AS
Performance |
Timeline |
Scandinavian Investment |
Konsolidator AS |
Scandinavian Investment and Konsolidator Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Scandinavian Investment and Konsolidator
The main advantage of trading using opposite Scandinavian Investment and Konsolidator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Investment position performs unexpectedly, Konsolidator 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 Konsolidator will offset losses from the drop in Konsolidator's long position.Scandinavian Investment vs. North Media AS | Scandinavian Investment vs. Rovsing AS | Scandinavian Investment vs. Alm Brand | Scandinavian Investment vs. SKAKO AS |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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