Correlation Between ALK Abell and Vestjysk Bank
Can any of the company-specific risk be diversified away by investing in both ALK Abell and Vestjysk 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 ALK Abell and Vestjysk Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALK Abell AS and Vestjysk Bank AS, you can compare the effects of market volatilities on ALK Abell and Vestjysk 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 ALK Abell with a short position of Vestjysk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALK Abell and Vestjysk Bank.
Diversification Opportunities for ALK Abell and Vestjysk Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ALK and Vestjysk is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ALK Abell AS and Vestjysk Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestjysk Bank AS and ALK Abell 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 ALK Abell AS are associated (or correlated) with Vestjysk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestjysk Bank AS has no effect on the direction of ALK Abell i.e., ALK Abell and Vestjysk Bank go up and down completely randomly.
Pair Corralation between ALK Abell and Vestjysk Bank
Assuming the 90 days trading horizon ALK Abell AS is expected to under-perform the Vestjysk Bank. In addition to that, ALK Abell is 4.84 times more volatile than Vestjysk Bank AS. It trades about -0.03 of its total potential returns per unit of risk. Vestjysk Bank AS is currently generating about -0.07 per unit of volatility. If you would invest 414.00 in Vestjysk Bank AS on August 30, 2024 and sell it today you would lose (4.00) from holding Vestjysk Bank AS or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALK Abell AS vs. Vestjysk Bank AS
Performance |
| Timeline |
| ALK Abell AS |
| Vestjysk Bank AS |
ALK Abell and Vestjysk Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALK Abell and Vestjysk Bank
The main advantage of trading using opposite ALK Abell and Vestjysk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALK Abell position performs unexpectedly, Vestjysk 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 Vestjysk Bank will offset losses from the drop in Vestjysk Bank's long position.| ALK Abell vs. Vestas Wind Systems | ALK Abell vs. Danske Bank AS | ALK Abell vs. Bavarian Nordic | ALK Abell vs. DSV Panalpina AS |
| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
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 CEOs Directory module to screen CEOs from public companies around the world.
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