Correlation Between Skjern Bank and North Media
Can any of the company-specific risk be diversified away by investing in both Skjern Bank and North Media 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 North Media 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 North Media AS, you can compare the effects of market volatilities on Skjern Bank and North Media 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 North Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and North Media.
Diversification Opportunities for Skjern Bank and North Media
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Skjern and North is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and North Media AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Media AS 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 North Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Media AS has no effect on the direction of Skjern Bank i.e., Skjern Bank and North Media go up and down completely randomly.
Pair Corralation between Skjern Bank and North Media
Assuming the 90 days trading horizon Skjern Bank AS is expected to generate 0.9 times more return on investment than North Media. However, Skjern Bank AS is 1.11 times less risky than North Media. It trades about 0.05 of its potential returns per unit of risk. North Media AS is currently generating about 0.0 per unit of risk. If you would invest 11,216 in Skjern Bank AS on September 4, 2024 and sell it today you would earn a total of 4,084 from holding Skjern Bank AS or generate 36.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skjern Bank AS vs. North Media AS
Performance |
| Timeline |
| Skjern Bank AS |
| North Media AS |
Skjern Bank and North Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and North Media
The main advantage of trading using opposite Skjern Bank and North Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank position performs unexpectedly, North Media 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 North Media will offset losses from the drop in North Media's long position.| Skjern Bank vs. FLSmidth Co | Skjern Bank vs. Danske Bank AS | Skjern Bank vs. ISS AS | Skjern Bank vs. DSV Panalpina AS |
| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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