Correlation Between Alm Brand and Maj Invest
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By analyzing existing cross correlation between Alm Brand and Maj Invest Glob, you can compare the effects of market volatilities on Alm Brand and Maj 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 Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alm Brand and Maj Invest.
Diversification Opportunities for Alm Brand and Maj Invest
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alm and Maj is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand and Maj Invest Glob in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Glob 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Glob has no effect on the direction of Alm Brand i.e., Alm Brand and Maj Invest go up and down completely randomly.
Pair Corralation between Alm Brand and Maj Invest
Assuming the 90 days trading horizon Alm Brand is expected to generate 1.96 times less return on investment than Maj Invest. In addition to that, Alm Brand is 1.28 times more volatile than Maj Invest Glob. It trades about 0.1 of its total potential returns per unit of risk. Maj Invest Glob is currently generating about 0.26 per unit of volatility. If you would invest 13,410 in Maj Invest Glob on September 1, 2024 and sell it today you would earn a total of 763.00 from holding Maj Invest Glob or generate 5.69% 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. Maj Invest Glob
Performance |
| Timeline |
| Alm Brand |
| Maj Invest Glob |
Alm Brand and Maj Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alm Brand and Maj Invest
The main advantage of trading using opposite Alm Brand and Maj Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alm Brand position performs unexpectedly, Maj 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 Maj Invest will offset losses from the drop in Maj Invest's long position.The idea behind Alm Brand and Maj Invest Glob 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.| Maj Invest vs. Novo Nordisk AS | Maj Invest vs. Nordea Bank Abp | Maj Invest vs. DSV Panalpina AS | Maj 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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