Correlation Between Skue Sparebank and Arcticzymes Technologies
Can any of the company-specific risk be diversified away by investing in both Skue Sparebank and Arcticzymes 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 Skue Sparebank and Arcticzymes Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skue Sparebank and Arcticzymes Technologies ASA, you can compare the effects of market volatilities on Skue Sparebank and Arcticzymes 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 Skue Sparebank with a short position of Arcticzymes Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skue Sparebank and Arcticzymes Technologies.
Diversification Opportunities for Skue Sparebank and Arcticzymes Technologies
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Skue and Arcticzymes is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Skue Sparebank and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes Technologies and Skue Sparebank 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 Skue Sparebank are associated (or correlated) with Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Skue Sparebank i.e., Skue Sparebank and Arcticzymes Technologies go up and down completely randomly.
Pair Corralation between Skue Sparebank and Arcticzymes Technologies
Assuming the 90 days trading horizon Skue Sparebank is expected to generate 0.38 times more return on investment than Arcticzymes Technologies. However, Skue Sparebank is 2.67 times less risky than Arcticzymes Technologies. It trades about 0.09 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about -0.02 per unit of risk. If you would invest 21,178 in Skue Sparebank on November 27, 2024 and sell it today you would earn a total of 13,882 from holding Skue Sparebank or generate 65.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skue Sparebank vs. Arcticzymes Technologies ASA
Performance |
| Timeline |
| Skue Sparebank |
| Arcticzymes Technologies |
Skue Sparebank and Arcticzymes Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skue Sparebank and Arcticzymes Technologies
The main advantage of trading using opposite Skue Sparebank and Arcticzymes Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skue Sparebank position performs unexpectedly, Arcticzymes 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 Arcticzymes Technologies will offset losses from the drop in Arcticzymes Technologies' long position.| Skue Sparebank vs. Melhus Sparebank | Skue Sparebank vs. Sparebanken Ost | Skue Sparebank vs. Sparebanken Sor |
| Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron ASA | Arcticzymes Technologies vs. Vow ASA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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