Correlation Between Fynske Bank and Ringkjoebing Landbobank

Can any of the company-specific risk be diversified away by investing in both Fynske Bank and Ringkjoebing Landbobank 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 Ringkjoebing Landbobank 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 Ringkjoebing Landbobank AS, you can compare the effects of market volatilities on Fynske Bank and Ringkjoebing Landbobank 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 Ringkjoebing Landbobank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fynske Bank and Ringkjoebing Landbobank.

Diversification Opportunities for Fynske Bank and Ringkjoebing Landbobank

-0.59

Correlation Coefficient

Fynske Bank  Ringkjoebing Landbobank

Excellent diversification

The 3 months correlation between Fynske and Ringkjoebing is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fynske Bank AS and Ringkjoebing Landbobank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ringkjoebing Landbobank 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 Ringkjoebing Landbobank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ringkjoebing Landbobank has no effect on the direction of Fynske Bank i.e., Fynske Bank and Ringkjoebing Landbobank go up and down completely randomly.

Pair Corralation between Fynske Bank and Ringkjoebing Landbobank

Assuming the 90 days trading horizon Fynske Bank AS is expected to under-perform the Ringkjoebing Landbobank. In addition to that, Fynske Bank is 1.16 times more volatile than Ringkjoebing Landbobank AS. It trades about -0.08 of its total potential returns per unit of risk. Ringkjoebing Landbobank AS is currently generating about 0.12 per unit of volatility. If you would invest  108,300  in Ringkjoebing Landbobank AS on September 4, 2024 and sell it today you would earn a total of  9,700  from holding Ringkjoebing Landbobank AS or generate 8.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Fynske Bank AS  vs.  Ringkjoebing Landbobank AS

Fynske Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fynske Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Ringkjoebing Landbobank

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ringkjoebing Landbobank AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Ringkjoebing Landbobank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fynske Bank and Ringkjoebing Landbobank

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

The idea behind Fynske Bank AS and Ringkjoebing Landbobank 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.