Correlation Between Vestjysk Bank and Erria AS
Can any of the company-specific risk be diversified away by investing in both Vestjysk Bank and Erria AS 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 Vestjysk Bank and Erria AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestjysk Bank AS and Erria AS, you can compare the effects of market volatilities on Vestjysk Bank and Erria AS 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 Vestjysk Bank with a short position of Erria AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and Erria AS.
Diversification Opportunities for Vestjysk Bank and Erria AS
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vestjysk and Erria is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk Bank AS and Erria AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erria AS and Vestjysk Bank 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 Vestjysk Bank AS are associated (or correlated) with Erria AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erria AS has no effect on the direction of Vestjysk Bank i.e., Vestjysk Bank and Erria AS go up and down completely randomly.
Pair Corralation between Vestjysk Bank and Erria AS
Assuming the 90 days trading horizon Vestjysk Bank AS is expected to generate 0.37 times more return on investment than Erria AS. However, Vestjysk Bank AS is 2.71 times less risky than Erria AS. It trades about 0.02 of its potential returns per unit of risk. Erria AS is currently generating about 0.0 per unit of risk. If you would invest 389.00 in Vestjysk Bank AS on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Vestjysk Bank AS or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestjysk Bank AS vs. Erria AS
Performance |
| Timeline |
| Vestjysk Bank AS |
| Erria AS |
Vestjysk Bank and Erria AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and Erria AS
The main advantage of trading using opposite Vestjysk Bank and Erria AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk Bank position performs unexpectedly, Erria AS 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 Erria AS will offset losses from the drop in Erria AS's long position.| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
| Erria AS vs. PARKEN Sport Entertainment | Erria AS vs. Hvidbjerg Bank | Erria AS vs. Nordinvestments AS | Erria AS vs. North Media 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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