Correlation Between Roku and Maj Invest
Can any of the company-specific risk be diversified away by investing in both Roku and Maj Invest 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 Roku and Maj Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and Maj Invest Value, you can compare the effects of market volatilities on Roku and Maj Invest 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 Roku with a short position of Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Maj Invest.
Diversification Opportunities for Roku and Maj Invest
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Roku and Maj is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Maj Invest Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Value and Roku 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 Roku Inc are associated (or correlated) with Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Value has no effect on the direction of Roku i.e., Roku and Maj Invest go up and down completely randomly.
Pair Corralation between Roku and Maj Invest
Given the investment horizon of 90 days Roku Inc is expected to under-perform the Maj Invest. In addition to that, Roku is 4.04 times more volatile than Maj Invest Value. It trades about -0.08 of its total potential returns per unit of risk. Maj Invest Value is currently generating about -0.17 per unit of volatility. If you would invest 16,628 in Maj Invest Value on January 26, 2024 and sell it today you would lose (318.00) from holding Maj Invest Value or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Roku Inc vs. Maj Invest Value
Performance |
| Timeline |
| Roku Inc |
| Maj Invest Value |
Roku and Maj Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and Maj Invest
The main advantage of trading using opposite Roku and Maj Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, Maj Invest 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 Maj Invest will offset losses from the drop in Maj Invest's long position.The idea behind Roku Inc and Maj Invest Value 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.| Maj Invest vs. Novo Nordisk AS | Maj Invest vs. Nordea Bank Abp | Maj Invest vs. DSV Panalpina AS | Maj Invest vs. AP Mller |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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