Correlation Between SOEDER SPORTFISKE and First BanCorp

Can any of the company-specific risk be diversified away by investing in both SOEDER SPORTFISKE and First BanCorp 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 SOEDER SPORTFISKE and First BanCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SOEDER SPORTFISKE AB and First BanCorp, you can compare the effects of market volatilities on SOEDER SPORTFISKE and First BanCorp 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 SOEDER SPORTFISKE with a short position of First BanCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOEDER SPORTFISKE and First BanCorp.

Diversification Opportunities for SOEDER SPORTFISKE and First BanCorp

0.21

Correlation Coefficient

SOEDER SPORTFISKE  First BanCorp

Modest diversification

The 3 months correlation between SOEDER and First is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SOEDER SPORTFISKE AB and First BanCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First BanCorp and SOEDER SPORTFISKE 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 SOEDER SPORTFISKE AB are associated (or correlated) with First BanCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First BanCorp has no effect on the direction of SOEDER SPORTFISKE i.e., SOEDER SPORTFISKE and First BanCorp go up and down completely randomly.

Pair Corralation between SOEDER SPORTFISKE and First BanCorp

Assuming the 90 days horizon SOEDER SPORTFISKE AB is expected to generate 1.96 times more return on investment than First BanCorp. However, SOEDER SPORTFISKE is 1.96 times more volatile than First BanCorp. It trades about 0.05 of its potential returns per unit of risk. First BanCorp is currently generating about 0.06 per unit of risk. If you would invest  125.00  in SOEDER SPORTFISKE AB on October 26, 2024 and sell it today you would earn a total of  124.00  from holding SOEDER SPORTFISKE AB or generate 99.2% return on investment over 90 days.

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

SOEDER SPORTFISKE AB  vs.  First BanCorp

SOEDER SPORTFISKE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SOEDER SPORTFISKE AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SOEDER SPORTFISKE reported solid returns over the last few months and may actually be approaching a breakup point.

First BanCorp

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First BanCorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, First BanCorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOEDER SPORTFISKE and First BanCorp

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

The idea behind SOEDER SPORTFISKE AB and First BanCorp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.