Correlation Between Skjern Bank and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Skjern Bank and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on Skjern Bank and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and PARKEN Sport.
Diversification Opportunities for Skjern Bank and PARKEN Sport
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Skjern and PARKEN is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Skjern Bank i.e., Skjern Bank and PARKEN Sport go up and down completely randomly.
Pair Corralation between Skjern Bank and PARKEN Sport
Assuming the 90 days trading horizon Skjern Bank AS is expected to generate 1.15 times more return on investment than PARKEN Sport. However, Skjern Bank is 1.15 times more volatile than PARKEN Sport Entertainment. It trades about 0.18 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.14 per unit of risk. If you would invest 19,550 in Skjern Bank AS on November 27, 2024 and sell it today you would earn a total of 850.00 from holding Skjern Bank AS or generate 4.35% 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. PARKEN Sport Entertainment
Performance |
| Timeline |
| Skjern Bank AS |
| PARKEN Sport Enterta |
Skjern Bank and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and PARKEN Sport
The main advantage of trading using opposite Skjern Bank and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Skjern Bank vs. Nordinvestments AS | Skjern Bank vs. BankIn Bredygt Klimaakt | Skjern Bank vs. FOM Technologies AS | Skjern Bank vs. NTG Nordic Transport |
| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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