Correlation Between ROMERIKE SPAREBANK and VIVENDI UNSPONARD

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

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

Diversification Opportunities for ROMERIKE SPAREBANK and VIVENDI UNSPONARD

-0.68

Correlation Coefficient

ROMERIKE SPAREBANK  VIVENDI UNSPONARD

Excellent diversification

The 3 months correlation between ROMERIKE and VIVENDI is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ROMERIKE SPAREBANK NK and VIVENDI UNSPONARD EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVENDI UNSPONARD and ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK NK are associated (or correlated) with VIVENDI UNSPONARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVENDI UNSPONARD has no effect on the direction of ROMERIKE SPAREBANK i.e., ROMERIKE SPAREBANK and VIVENDI UNSPONARD go up and down completely randomly.

Pair Corralation between ROMERIKE SPAREBANK and VIVENDI UNSPONARD

Assuming the 90 days horizon ROMERIKE SPAREBANK NK is expected to generate 0.52 times more return on investment than VIVENDI UNSPONARD. However, ROMERIKE SPAREBANK NK is 1.93 times less risky than VIVENDI UNSPONARD. It trades about 0.28 of its potential returns per unit of risk. VIVENDI UNSPONARD EO is currently generating about -0.35 per unit of risk. If you would invest  1,012  in ROMERIKE SPAREBANK NK on September 5, 2024 and sell it today you would earn a total of  58.00  from holding ROMERIKE SPAREBANK NK or generate 5.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

ROMERIKE SPAREBANK NK  vs.  VIVENDI UNSPONARD EO

ROMERIKE SPAREBANK

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ROMERIKE SPAREBANK NK are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ROMERIKE SPAREBANK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VIVENDI UNSPONARD

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ROMERIKE SPAREBANK and VIVENDI UNSPONARD

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

The idea behind ROMERIKE SPAREBANK NK and VIVENDI UNSPONARD EO 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.

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 Stocks Directory module to find actively traded stocks across global markets.