Correlation Analysis Between OMXRGI and OMXVGI

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