Correlation Between Alm Brand and Danske Invest
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By analyzing existing cross correlation between Alm Brand and Danske Invest Euro, you can compare the effects of market volatilities on Alm Brand and Danske Invest 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 Alm Brand with a short position of Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alm Brand and Danske Invest.
Diversification Opportunities for Alm Brand and Danske Invest
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alm and Danske is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand and Danske Invest Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest Euro and Alm Brand 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 Alm Brand are associated (or correlated) with Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest Euro has no effect on the direction of Alm Brand i.e., Alm Brand and Danske Invest go up and down completely randomly.
Pair Corralation between Alm Brand and Danske Invest
Assuming the 90 days trading horizon Alm Brand is expected to generate 9.52 times more return on investment than Danske Invest. However, Alm Brand is 9.52 times more volatile than Danske Invest Euro. It trades about 0.1 of its potential returns per unit of risk. Danske Invest Euro is currently generating about 0.47 per unit of risk. If you would invest 1,332 in Alm Brand on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Alm Brand or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alm Brand vs. Danske Invest Euro
Performance |
| Timeline |
| Alm Brand |
| Danske Invest Euro |
Alm Brand and Danske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alm Brand and Danske Invest
The main advantage of trading using opposite Alm Brand and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alm Brand position performs unexpectedly, Danske Invest 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 Danske Invest will offset losses from the drop in Danske Invest's long position.The idea behind Alm Brand and Danske Invest Euro 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.| Danske Invest vs. Novo Nordisk AS | Danske Invest vs. Nordea Bank Abp | Danske Invest vs. DSV Panalpina AS | Danske Invest vs. AP Mller |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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