Correlation Between G8 EDUCATION and ROMERIKE SPAREBANK

Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION 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 G8 EDUCATION and ROMERIKE SPAREBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G8 EDUCATION and ROMERIKE SPAREBANK NK, you can compare the effects of market volatilities on G8 EDUCATION 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 G8 EDUCATION with a short position of ROMERIKE SPAREBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and ROMERIKE SPAREBANK.

Diversification Opportunities for G8 EDUCATION and ROMERIKE SPAREBANK

0.11

Correlation Coefficient

G8 EDUCATION  ROMERIKE SPAREBANK

Average diversification

The 3 months correlation between 3EAG and ROMERIKE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and ROMERIKE SPAREBANK NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROMERIKE SPAREBANK and G8 EDUCATION 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 G8 EDUCATION 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 G8 EDUCATION i.e., G8 EDUCATION and ROMERIKE SPAREBANK go up and down completely randomly.

Pair Corralation between G8 EDUCATION and ROMERIKE SPAREBANK

Assuming the 90 days trading horizon G8 EDUCATION is expected to under-perform the ROMERIKE SPAREBANK. In addition to that, G8 EDUCATION is 1.67 times more volatile than ROMERIKE SPAREBANK NK. It trades about -0.02 of its total potential returns per unit of risk. ROMERIKE SPAREBANK NK is currently generating about 0.22 per unit of volatility. If you would invest  1,053  in ROMERIKE SPAREBANK NK on December 21, 2024 and sell it today you would earn a total of  132.00  from holding ROMERIKE SPAREBANK NK or generate 12.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

G8 EDUCATION  vs.  ROMERIKE SPAREBANK NK

G8 EDUCATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days G8 EDUCATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, G8 EDUCATION is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ROMERIKE SPAREBANK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ROMERIKE SPAREBANK NK are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ROMERIKE SPAREBANK reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G8 EDUCATION and ROMERIKE SPAREBANK

The main advantage of trading using opposite G8 EDUCATION and ROMERIKE SPAREBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION 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.

The idea behind G8 EDUCATION and ROMERIKE SPAREBANK NK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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..