Correlation Between UTD OV and ROMERIKE SPAREBANK
Can any of the company-specific risk be diversified away by investing in both UTD OV and ROMERIKE SPAREBANK 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 UTD OV and ROMERIKE SPAREBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UTD OV BK LOC ADR1 and ROMERIKE SPAREBANK NK, you can compare the effects of market volatilities on UTD OV and ROMERIKE SPAREBANK 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 UTD OV with a short position of ROMERIKE SPAREBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of UTD OV and ROMERIKE SPAREBANK.
Diversification Opportunities for UTD OV and ROMERIKE SPAREBANK
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UTD and ROMERIKE is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding UTD OV BK LOC ADR1 and ROMERIKE SPAREBANK NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROMERIKE SPAREBANK and UTD OV 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 UTD OV BK LOC ADR1 are associated (or correlated) with ROMERIKE SPAREBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROMERIKE SPAREBANK has no effect on the direction of UTD OV i.e., UTD OV and ROMERIKE SPAREBANK go up and down completely randomly.
Pair Corralation between UTD OV and ROMERIKE SPAREBANK
Assuming the 90 days trading horizon UTD OV BK LOC ADR1 is expected to generate 0.78 times more return on investment than ROMERIKE SPAREBANK. However, UTD OV BK LOC ADR1 is 1.28 times less risky than ROMERIKE SPAREBANK. It trades about 0.26 of its potential returns per unit of risk. ROMERIKE SPAREBANK NK is currently generating about 0.07 per unit of risk. If you would invest 4,960 in UTD OV BK LOC ADR1 on September 15, 2024 and sell it today you would earn a total of 240.00 from holding UTD OV BK LOC ADR1 or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UTD OV BK LOC ADR1 vs. ROMERIKE SPAREBANK NK
Performance |
| Timeline |
| UTD OV BK |
| ROMERIKE SPAREBANK |
UTD OV and ROMERIKE SPAREBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UTD OV and ROMERIKE SPAREBANK
The main advantage of trading using opposite UTD OV and ROMERIKE SPAREBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UTD OV position performs unexpectedly, ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK will offset losses from the drop in ROMERIKE SPAREBANK's long position.| UTD OV vs. POSBO UNSPADRS20YC1 | UTD OV vs. Postal Savings Bank | UTD OV vs. Superior Plus Corp | UTD OV vs. SIVERS SEMICONDUCTORS AB |
| ROMERIKE SPAREBANK vs. POSBO UNSPADRS20YC1 | ROMERIKE SPAREBANK vs. Postal Savings Bank | ROMERIKE SPAREBANK vs. UTD OV BK LOC ADR1 | ROMERIKE SPAREBANK vs. Superior Plus Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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