Correlation Between Rovsing AS and Columbus

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

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

Diversification Opportunities for Rovsing AS and Columbus

0.45

Correlation Coefficient

Rovsing AS  Columbus

Very weak diversification

The 3 months correlation between Rovsing and Columbus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Rovsing AS and Columbus AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus AS and Rovsing 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 Rovsing AS are associated (or correlated) with Columbus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus AS has no effect on the direction of Rovsing AS i.e., Rovsing AS and Columbus go up and down completely randomly.

Pair Corralation between Rovsing AS and Columbus

Assuming the 90 days trading horizon Rovsing AS is expected to generate 2.16 times more return on investment than Columbus. However, Rovsing AS is 2.16 times more volatile than Columbus AS. It trades about -0.03 of its potential returns per unit of risk. Columbus AS is currently generating about -0.11 per unit of risk. If you would invest  4,380  in Rovsing AS on October 6, 2024 and sell it today you would lose (220.00) from holding Rovsing AS or give up 5.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

Rovsing AS  vs.  Columbus AS

Rovsing AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rovsing AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Columbus AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbus AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Rovsing AS and Columbus

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

The idea behind Rovsing AS and Columbus 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.