Correlation Between SCANDINAV REAL and REVO INSURANCE

Can any of the company-specific risk be diversified away by investing in both SCANDINAV REAL and REVO INSURANCE 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 SCANDINAV REAL and REVO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCANDINAV REAL HEART and REVO INSURANCE SPA, you can compare the effects of market volatilities on SCANDINAV REAL and REVO INSURANCE 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 SCANDINAV REAL with a short position of REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDINAV REAL and REVO INSURANCE.

Diversification Opportunities for SCANDINAV REAL and REVO INSURANCE

-0.86

Correlation Coefficient

SCANDINAV REAL  REVO INSURANCE

Pay attention - limited upside

The 3 months correlation between SCANDINAV and REVO is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding SCANDINAV REAL HEART and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA and SCANDINAV REAL 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 SCANDINAV REAL HEART are associated (or correlated) with REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of SCANDINAV REAL i.e., SCANDINAV REAL and REVO INSURANCE go up and down completely randomly.

Pair Corralation between SCANDINAV REAL and REVO INSURANCE

Assuming the 90 days horizon SCANDINAV REAL HEART is expected to generate 57.23 times more return on investment than REVO INSURANCE. However, SCANDINAV REAL is 57.23 times more volatile than REVO INSURANCE SPA. It trades about 0.07 of its potential returns per unit of risk. REVO INSURANCE SPA is currently generating about 0.06 per unit of risk. If you would invest  1,018  in SCANDINAV REAL HEART on October 24, 2024 and sell it today you would lose (923.00) from holding SCANDINAV REAL HEART or give up 90.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.01%
Values	Daily Returns

SCANDINAV REAL HEART  vs.  REVO INSURANCE SPA

SCANDINAV REAL HEART

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDINAV REAL HEART has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

REVO INSURANCE SPA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCANDINAV REAL and REVO INSURANCE

The main advantage of trading using opposite SCANDINAV REAL and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDINAV REAL position performs unexpectedly, REVO INSURANCE 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.

The idea behind SCANDINAV REAL HEART and REVO INSURANCE SPA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.