Correlation Between Roblon AS and Schouw

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

By analyzing existing cross correlation between Roblon AS and Schouw Co, you can compare the effects of market volatilities on Roblon AS and Schouw 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 Roblon AS with a short position of Schouw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roblon AS and Schouw.

Diversification Opportunities for Roblon AS and Schouw

-0.43

Correlation Coefficient

Roblon AS  Schouw

Very good diversification

The 3 months correlation between Roblon and Schouw is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Roblon AS and Schouw Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schouw and Roblon AS 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 Roblon AS are associated (or correlated) with Schouw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schouw has no effect on the direction of Roblon AS i.e., Roblon AS and Schouw go up and down completely randomly.

Pair Corralation between Roblon AS and Schouw

Assuming the 90 days trading horizon Roblon AS is expected to generate 21.68 times less return on investment than Schouw. In addition to that, Roblon AS is 1.3 times more volatile than Schouw Co. It trades about 0.0 of its total potential returns per unit of risk. Schouw Co is currently generating about 0.06 per unit of volatility. If you would invest  42,750  in Schouw Co on September 24, 2024 and sell it today you would earn a total of  9,850  from holding Schouw Co or generate 23.04% return on investment over 90 days.

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

Roblon AS  vs.  Schouw Co

Roblon AS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Roblon AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Roblon AS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Schouw

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schouw Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Roblon AS and Schouw

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

The idea behind Roblon AS and Schouw Co 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.