Correlation Between REMEDY ENTERTAINMENT and ROMERIKE SPAREBANK

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

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

Diversification Opportunities for REMEDY ENTERTAINMENT and ROMERIKE SPAREBANK

-0.61

Correlation Coefficient

REMEDY ENTERTAINMENT  ROMERIKE SPAREBANK

Excellent diversification

The 3 months correlation between REMEDY and ROMERIKE is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and ROMERIKE SPAREBANK NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROMERIKE SPAREBANK and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and ROMERIKE SPAREBANK go up and down completely randomly.

Pair Corralation between REMEDY ENTERTAINMENT and ROMERIKE SPAREBANK

Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to under-perform the ROMERIKE SPAREBANK. But the stock apears to be less risky and, when comparing its historical volatility, REMEDY ENTERTAINMENT OYJ is 13.74 times less risky than ROMERIKE SPAREBANK. The stock trades about -0.06 of its potential returns per unit of risk. The ROMERIKE SPAREBANK NK is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,055  in ROMERIKE SPAREBANK NK on October 24, 2024 and sell it today you would earn a total of  28.00  from holding ROMERIKE SPAREBANK NK or generate 2.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

REMEDY ENTERTAINMENT OYJ  vs.  ROMERIKE SPAREBANK NK

REMEDY ENTERTAINMENT OYJ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REMEDY ENTERTAINMENT OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ROMERIKE SPAREBANK

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ROMERIKE SPAREBANK NK are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ROMERIKE SPAREBANK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with REMEDY ENTERTAINMENT and ROMERIKE SPAREBANK

The main advantage of trading using opposite REMEDY ENTERTAINMENT and ROMERIKE SPAREBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.