Correlation Between Roku and Seluxit AS
Can any of the company-specific risk be diversified away by investing in both Roku and Seluxit 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 Roku and Seluxit AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and Seluxit AS, you can compare the effects of market volatilities on Roku and Seluxit 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 Roku with a short position of Seluxit AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Seluxit AS.
Diversification Opportunities for Roku and Seluxit AS
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roku and Seluxit is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Seluxit AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seluxit AS 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 Seluxit AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seluxit AS has no effect on the direction of Roku i.e., Roku and Seluxit AS go up and down completely randomly.
Pair Corralation between Roku and Seluxit AS
Given the investment horizon of 90 days Roku is expected to generate 12.81 times less return on investment than Seluxit AS. But when comparing it to its historical volatility, Roku Inc is 1.75 times less risky than Seluxit AS. It trades about 0.0 of its potential returns per unit of risk. Seluxit AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 477.00 in Seluxit AS on January 26, 2024 and sell it today you would lose (127.00) from holding Seluxit AS or give up 26.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roku Inc vs. Seluxit AS
Performance |
| Timeline |
| Roku Inc |
| Seluxit AS |
Roku and Seluxit AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and Seluxit AS
The main advantage of trading using opposite Roku and Seluxit AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, Seluxit 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 Seluxit AS will offset losses from the drop in Seluxit AS's long position.The idea behind Roku Inc and Seluxit 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.| Seluxit AS vs. Kreditbanken AS | Seluxit AS vs. Ringkjoebing Landbobank AS | Seluxit AS vs. Skjern Bank AS | Seluxit AS vs. Jyske Bank 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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