Correlation Between Rolling Optics and Zwipe AS

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

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

Diversification Opportunities for Rolling Optics and Zwipe AS

0.57

Correlation Coefficient

Rolling Optics  Zwipe AS

Very weak diversification

The 3 months correlation between Rolling and Zwipe is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Rolling Optics Holding and Zwipe AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zwipe AS and Rolling Optics 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 Rolling Optics Holding are associated (or correlated) with Zwipe AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zwipe AS has no effect on the direction of Rolling Optics i.e., Rolling Optics and Zwipe AS go up and down completely randomly.

Pair Corralation between Rolling Optics and Zwipe AS

Assuming the 90 days horizon Rolling Optics Holding is expected to under-perform the Zwipe AS. But the stock apears to be less risky and, when comparing its historical volatility, Rolling Optics Holding is 4.0 times less risky than Zwipe AS. The stock trades about -0.11 of its potential returns per unit of risk. The Zwipe AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Zwipe AS on November 30, 2024 and sell it today you would lose (9.00) from holding Zwipe AS or give up 75.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Rolling Optics Holding  vs.  Zwipe AS

Rolling Optics Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rolling Optics Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Zwipe AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zwipe AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zwipe AS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rolling Optics and Zwipe AS

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

The idea behind Rolling Optics Holding and Zwipe AS 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.