Correlation Between Armada Hflr and ROMERIKE SPAREBANK

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

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

Diversification Opportunities for Armada Hflr and ROMERIKE SPAREBANK

-0.7

Correlation Coefficient

Armada Hflr  ROMERIKE SPAREBANK

Excellent diversification

The 3 months correlation between Armada and ROMERIKE is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and ROMERIKE SPAREBANK NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROMERIKE SPAREBANK and Armada Hflr 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 Armada Hflr Pr 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 Armada Hflr i.e., Armada Hflr and ROMERIKE SPAREBANK go up and down completely randomly.

Pair Corralation between Armada Hflr and ROMERIKE SPAREBANK

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the ROMERIKE SPAREBANK. In addition to that, Armada Hflr is 2.2 times more volatile than ROMERIKE SPAREBANK NK. It trades about -0.21 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 22, 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  ROMERIKE SPAREBANK NK

Armada Hflr Pr

Risk-Adjusted Performance

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 Armada Hflr and ROMERIKE SPAREBANK

The main advantage of trading using opposite Armada Hflr and ROMERIKE SPAREBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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 Armada Hflr Pr 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.