Correlation Between Scandinavian Medical and Nykredit Invest
Can any of the company-specific risk be diversified away by investing in both Scandinavian Medical and Nykredit Invest 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 Nykredit Invest 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 Nykredit Invest Korte, you can compare the effects of market volatilities on Scandinavian Medical and Nykredit Invest 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 Nykredit Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Medical and Nykredit Invest.
Diversification Opportunities for Scandinavian Medical and Nykredit Invest
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandinavian and Nykredit is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Medical Solutions and Nykredit Invest Korte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Korte 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 Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Korte has no effect on the direction of Scandinavian Medical i.e., Scandinavian Medical and Nykredit Invest go up and down completely randomly.
Pair Corralation between Scandinavian Medical and Nykredit Invest
Assuming the 90 days trading horizon Scandinavian Medical Solutions is expected to generate 14.86 times more return on investment than Nykredit Invest. However, Scandinavian Medical is 14.86 times more volatile than Nykredit Invest Korte. It trades about 0.01 of its potential returns per unit of risk. Nykredit Invest Korte is currently generating about 0.07 per unit of risk. If you would invest 680.00 in Scandinavian Medical Solutions on September 14, 2024 and sell it today you would lose (64.00) from holding Scandinavian Medical Solutions or give up 9.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Medical Solutions vs. Nykredit Invest Korte
Performance |
| Timeline |
| Scandinavian Medical |
| Nykredit Invest Korte |
Scandinavian Medical and Nykredit Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Medical and Nykredit Invest
The main advantage of trading using opposite Scandinavian Medical and Nykredit Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Medical position performs unexpectedly, Nykredit Invest 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 Nykredit Invest will offset losses from the drop in Nykredit Invest's long position.| Scandinavian Medical vs. Djurslands Bank | Scandinavian Medical vs. BankInvest Value Globale | Scandinavian Medical vs. BankIn Bredygt Klimaakt | Scandinavian Medical vs. Laan Spar Bank |
| Nykredit Invest vs. Nordfyns Bank AS | Nykredit Invest vs. Moens Bank AS | Nykredit Invest vs. Scandinavian Medical Solutions | Nykredit Invest vs. Skjern 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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