Correlation Between Skjern Bank and FOM Technologies
Can any of the company-specific risk be diversified away by investing in both Skjern Bank and FOM Technologies 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 Skjern Bank and FOM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skjern Bank AS and FOM Technologies AS, you can compare the effects of market volatilities on Skjern Bank and FOM Technologies 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 Skjern Bank with a short position of FOM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and FOM Technologies.
Diversification Opportunities for Skjern Bank and FOM Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Skjern and FOM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and FOM Technologies AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOM Technologies and Skjern Bank 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 Skjern Bank AS are associated (or correlated) with FOM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOM Technologies has no effect on the direction of Skjern Bank i.e., Skjern Bank and FOM Technologies go up and down completely randomly.
Pair Corralation between Skjern Bank and FOM Technologies
Assuming the 90 days trading horizon Skjern Bank AS is expected to generate 0.29 times more return on investment than FOM Technologies. However, Skjern Bank AS is 3.43 times less risky than FOM Technologies. It trades about -0.3 of its potential returns per unit of risk. FOM Technologies AS is currently generating about -0.46 per unit of risk. If you would invest 16,850 in Skjern Bank AS on August 29, 2024 and sell it today you would lose (1,300) from holding Skjern Bank AS or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skjern Bank AS vs. FOM Technologies AS
Performance |
| Timeline |
| Skjern Bank AS |
| FOM Technologies |
Skjern Bank and FOM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and FOM Technologies
The main advantage of trading using opposite Skjern Bank and FOM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank position performs unexpectedly, FOM Technologies 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 FOM Technologies will offset losses from the drop in FOM Technologies' long position.| Skjern Bank vs. Dataproces Group AS | Skjern Bank vs. cBrain AS | Skjern Bank vs. ALK Abell AS | Skjern Bank vs. ChemoMetec AS |
| FOM Technologies vs. cBrain AS | FOM Technologies vs. Penneo AS | FOM Technologies vs. Shape Robotics AS | FOM Technologies vs. ALK Abell 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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