Correlation Between Fynske Bank and International Business
Can any of the company-specific risk be diversified away by investing in both Fynske Bank and International Business 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 Fynske Bank and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fynske Bank AS and International Business Machines, you can compare the effects of market volatilities on Fynske Bank and International Business 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 Fynske Bank with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fynske Bank and International Business.
Diversification Opportunities for Fynske Bank and International Business
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fynske and International is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fynske Bank AS and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Fynske Bank 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 Fynske Bank AS are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Fynske Bank i.e., Fynske Bank and International Business go up and down completely randomly.
Pair Corralation between Fynske Bank and International Business
Assuming the 90 days trading horizon Fynske Bank AS is expected to generate 1.94 times more return on investment than International Business. However, Fynske Bank is 1.94 times more volatile than International Business Machines. It trades about 0.04 of its potential returns per unit of risk. International Business Machines is currently generating about -0.12 per unit of risk. If you would invest 16,500 in Fynske Bank AS on January 26, 2024 and sell it today you would earn a total of 200.00 from holding Fynske Bank AS or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Fynske Bank AS vs. International Business Machine
Performance |
| Timeline |
| Fynske Bank AS |
| International Business |
Fynske Bank and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fynske Bank and International Business
The main advantage of trading using opposite Fynske Bank and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fynske Bank position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Fynske Bank vs. Skjern Bank AS | Fynske Bank vs. Djurslands Bank | Fynske Bank vs. Sparekassen Sjaelland Fyn AS | Fynske Bank vs. Groenlandsbanken AS |
Check out your portfolio center.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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