Correlation Between Scandinavian Medical and Hvidbjerg Bank
Can any of the company-specific risk be diversified away by investing in both Scandinavian Medical and Hvidbjerg Bank 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 Scandinavian Medical and Hvidbjerg Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Medical Solutions and Hvidbjerg Bank, you can compare the effects of market volatilities on Scandinavian Medical and Hvidbjerg Bank 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 Scandinavian Medical with a short position of Hvidbjerg Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Medical and Hvidbjerg Bank.
Diversification Opportunities for Scandinavian Medical and Hvidbjerg Bank
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scandinavian and Hvidbjerg is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Medical Solutions and Hvidbjerg Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hvidbjerg Bank and Scandinavian Medical 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 Scandinavian Medical Solutions are associated (or correlated) with Hvidbjerg Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hvidbjerg Bank has no effect on the direction of Scandinavian Medical i.e., Scandinavian Medical and Hvidbjerg Bank go up and down completely randomly.
Pair Corralation between Scandinavian Medical and Hvidbjerg Bank
Assuming the 90 days trading horizon Scandinavian Medical is expected to generate 1.07 times less return on investment than Hvidbjerg Bank. In addition to that, Scandinavian Medical is 3.11 times more volatile than Hvidbjerg Bank. It trades about 0.05 of its total potential returns per unit of risk. Hvidbjerg Bank is currently generating about 0.16 per unit of volatility. If you would invest 11,300 in Hvidbjerg Bank on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Hvidbjerg Bank or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Medical Solutions vs. Hvidbjerg Bank
Performance |
| Timeline |
| Scandinavian Medical |
| Hvidbjerg Bank |
Scandinavian Medical and Hvidbjerg Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Medical and Hvidbjerg Bank
The main advantage of trading using opposite Scandinavian Medical and Hvidbjerg Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Medical position performs unexpectedly, Hvidbjerg Bank 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 Hvidbjerg Bank will offset losses from the drop in Hvidbjerg Bank's long position.| Scandinavian Medical vs. Novo Nordisk AS | Scandinavian Medical vs. Nordea Bank Abp | Scandinavian Medical vs. DSV Panalpina AS | Scandinavian Medical vs. AP Mller |
| Hvidbjerg Bank vs. Skjern Bank AS | Hvidbjerg Bank vs. Lollands Bank | Hvidbjerg Bank vs. Djurslands Bank | Hvidbjerg Bank vs. Nordfyns Bank 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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