Correlation Between Roku and SKAGEN M

Can any of the company-specific risk be diversified away by investing in both Roku and SKAGEN M 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 SKAGEN M into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Roku Inc and SKAGEN m, you can compare the effects of market volatilities on Roku and SKAGEN M 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 SKAGEN M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and SKAGEN M.

Diversification Opportunities for Roku and SKAGEN M

-0.02

Correlation Coefficient

Roku  SKAGEN M

Good diversification

The 3 months correlation between Roku and SKAGEN is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and SKAGEN m in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAGEN m 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 SKAGEN M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAGEN m has no effect on the direction of Roku i.e., Roku and SKAGEN M go up and down completely randomly.

Pair Corralation between Roku and SKAGEN M

Given the investment horizon of 90 days Roku Inc is expected to under-perform the SKAGEN M. In addition to that, Roku is 3.43 times more volatile than SKAGEN m. It trades about -0.08 of its total potential returns per unit of risk. SKAGEN m is currently generating about -0.26 per unit of volatility. If you would invest  16,880  in SKAGEN m on January 25, 2024 and sell it today you would lose (580.00) from holding SKAGEN m or give up 3.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Roku Inc  vs.  SKAGEN m

Roku Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roku Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SKAGEN m

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SKAGEN m has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SKAGEN M is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Roku and SKAGEN M

The main advantage of trading using opposite Roku and SKAGEN M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, SKAGEN M 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 SKAGEN M will offset losses from the drop in SKAGEN M's long position.

The idea behind Roku Inc and SKAGEN m 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.

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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.