Correlation Between SKAKO AS and Broendbyernes
Can any of the company-specific risk be diversified away by investing in both SKAKO AS 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 SKAKO AS and Broendbyernes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SKAKO AS and Broendbyernes IF Fodbold, you can compare the effects of market volatilities on SKAKO AS 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 SKAKO AS with a short position of Broendbyernes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKAKO AS and Broendbyernes.
Diversification Opportunities for SKAKO AS and Broendbyernes
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SKAKO and Broendbyernes is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SKAKO AS 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 SKAKO AS 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 SKAKO AS 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 SKAKO AS i.e., SKAKO AS and Broendbyernes go up and down completely randomly.
Pair Corralation between SKAKO AS and Broendbyernes
Assuming the 90 days trading horizon SKAKO AS is expected to under-perform the Broendbyernes. In addition to that, SKAKO AS is 1.37 times more volatile than Broendbyernes IF Fodbold. It trades about -0.11 of its total potential returns per unit of risk. Broendbyernes IF Fodbold is currently generating about -0.05 per unit of volatility. If you would invest 52.00 in Broendbyernes IF Fodbold on September 19, 2024 and sell it today you would lose (1.00) from holding Broendbyernes IF Fodbold or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKAKO AS vs. Broendbyernes IF Fodbold
Performance |
| Timeline |
| SKAKO AS |
| Broendbyernes IF Fodbold |
SKAKO AS and Broendbyernes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKAKO AS and Broendbyernes
The main advantage of trading using opposite SKAKO AS and Broendbyernes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKAKO AS 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.The idea behind SKAKO AS and Broendbyernes IF Fodbold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Broendbyernes vs. PARKEN Sport Entertainment | Broendbyernes vs. Bang Olufsen | Broendbyernes vs. BioPorto | Broendbyernes vs. cBrain 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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