Correlation Between Strategic Investments and EgnsINVEST Ejendomme
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and EgnsINVEST Ejendomme 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 Strategic Investments and EgnsINVEST Ejendomme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and EgnsINVEST Ejendomme Tyskland, you can compare the effects of market volatilities on Strategic Investments and EgnsINVEST Ejendomme 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 Strategic Investments with a short position of EgnsINVEST Ejendomme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and EgnsINVEST Ejendomme.
Diversification Opportunities for Strategic Investments and EgnsINVEST Ejendomme
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and EgnsINVEST is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and EgnsINVEST Ejendomme Tyskland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EgnsINVEST Ejendomme and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with EgnsINVEST Ejendomme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EgnsINVEST Ejendomme has no effect on the direction of Strategic Investments i.e., Strategic Investments and EgnsINVEST Ejendomme go up and down completely randomly.
Pair Corralation between Strategic Investments and EgnsINVEST Ejendomme
Assuming the 90 days trading horizon Strategic Investments AS is expected to under-perform the EgnsINVEST Ejendomme. In addition to that, Strategic Investments is 1.87 times more volatile than EgnsINVEST Ejendomme Tyskland. It trades about -0.2 of its total potential returns per unit of risk. EgnsINVEST Ejendomme Tyskland is currently generating about -0.02 per unit of volatility. If you would invest 13,100 in EgnsINVEST Ejendomme Tyskland on September 13, 2024 and sell it today you would lose (100.00) from holding EgnsINVEST Ejendomme Tyskland or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. EgnsINVEST Ejendomme Tyskland
Performance |
| Timeline |
| Strategic Investments |
| EgnsINVEST Ejendomme |
Strategic Investments and EgnsINVEST Ejendomme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and EgnsINVEST Ejendomme
The main advantage of trading using opposite Strategic Investments and EgnsINVEST Ejendomme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, EgnsINVEST Ejendomme 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 EgnsINVEST Ejendomme will offset losses from the drop in EgnsINVEST Ejendomme's long position.| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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