Correlation Between Strategic Investments and Fynske Bank
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and Fynske 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 Strategic Investments and Fynske Bank 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 Fynske Bank AS, you can compare the effects of market volatilities on Strategic Investments and Fynske 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 Strategic Investments with a short position of Fynske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Fynske Bank.
Diversification Opportunities for Strategic Investments and Fynske Bank
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Strategic and Fynske is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Fynske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fynske Bank AS 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 Fynske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fynske Bank AS has no effect on the direction of Strategic Investments i.e., Strategic Investments and Fynske Bank go up and down completely randomly.
Pair Corralation between Strategic Investments and Fynske Bank
Assuming the 90 days trading horizon Strategic Investments AS is expected to generate 1.28 times more return on investment than Fynske Bank. However, Strategic Investments is 1.28 times more volatile than Fynske Bank AS. It trades about -0.01 of its potential returns per unit of risk. Fynske Bank AS is currently generating about -0.08 per unit of risk. If you would invest 109.00 in Strategic Investments AS on September 1, 2024 and sell it today you would lose (1.00) from holding Strategic Investments AS or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Fynske Bank AS
Performance |
| Timeline |
| Strategic Investments |
| Fynske Bank AS |
Strategic Investments and Fynske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Fynske Bank
The main advantage of trading using opposite Strategic Investments and Fynske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, Fynske 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 Fynske Bank will offset losses from the drop in Fynske Bank's long position.| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS | Strategic Investments vs. Danske Invest |
| Fynske Bank vs. Sydbank AS | Fynske Bank vs. Jyske Bank AS | Fynske Bank vs. Alm Brand | Fynske Bank vs. Nordea Bank Abp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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