Correlation Between Fynske Bank and Skjern Bank
Can any of the company-specific risk be diversified away by investing in both Fynske Bank and Skjern Bank 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 Skjern Bank 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 Skjern Bank AS, you can compare the effects of market volatilities on Fynske Bank and Skjern Bank 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 Skjern Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fynske Bank and Skjern Bank.
Diversification Opportunities for Fynske Bank and Skjern Bank
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fynske and Skjern is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fynske Bank AS and Skjern Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skjern Bank AS 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 Skjern Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skjern Bank AS has no effect on the direction of Fynske Bank i.e., Fynske Bank and Skjern Bank go up and down completely randomly.
Pair Corralation between Fynske Bank and Skjern Bank
Assuming the 90 days trading horizon Fynske Bank AS is expected to generate 1.59 times more return on investment than Skjern Bank. However, Fynske Bank is 1.59 times more volatile than Skjern Bank AS. It trades about 0.23 of its potential returns per unit of risk. Skjern Bank AS is currently generating about -0.02 per unit of risk. If you would invest 15,230 in Fynske Bank AS on January 20, 2024 and sell it today you would earn a total of 1,370 from holding Fynske Bank AS or generate 9.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fynske Bank AS vs. Skjern Bank AS
Performance |
Timeline |
Fynske Bank AS |
Skjern Bank AS |
Fynske Bank and Skjern Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fynske Bank and Skjern Bank
The main advantage of trading using opposite Fynske Bank and Skjern Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fynske Bank position performs unexpectedly, Skjern Bank 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 Skjern Bank will offset losses from the drop in Skjern Bank's 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 |
Skjern Bank vs. Prime Office AS | Skjern Bank vs. Spar Nord Bank | Skjern Bank vs. Scandinavian Medical Solutions | Skjern Bank vs. NTG Nordic Transport |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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