Correlation Between Alm Brand and Moens Bank
Can any of the company-specific risk be diversified away by investing in both Alm Brand and Moens 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 Alm Brand and Moens Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alm Brand and Moens Bank AS, you can compare the effects of market volatilities on Alm Brand and Moens 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 Alm Brand with a short position of Moens Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alm Brand and Moens Bank.
Diversification Opportunities for Alm Brand and Moens Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alm and Moens is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand and Moens Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moens Bank AS 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 Moens Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moens Bank AS has no effect on the direction of Alm Brand i.e., Alm Brand and Moens Bank go up and down completely randomly.
Pair Corralation between Alm Brand and Moens Bank
Assuming the 90 days trading horizon Alm Brand is expected to generate 0.69 times more return on investment than Moens Bank. However, Alm Brand is 1.45 times less risky than Moens Bank. It trades about 0.26 of its potential returns per unit of risk. Moens Bank AS is currently generating about 0.09 per unit of risk. If you would invest 1,503 in Alm Brand on November 28, 2024 and sell it today you would earn a total of 78.00 from holding Alm Brand or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alm Brand vs. Moens Bank AS
Performance |
| Timeline |
| Alm Brand |
| Moens Bank AS |
Alm Brand and Moens Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alm Brand and Moens Bank
The main advantage of trading using opposite Alm Brand and Moens Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alm Brand position performs unexpectedly, Moens 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 Moens Bank will offset losses from the drop in Moens Bank's long position.The idea behind Alm Brand and Moens Bank 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.| Moens Bank vs. Skjern Bank AS | Moens Bank vs. Lollands Bank | Moens Bank vs. Nordfyns Bank AS | Moens Bank vs. Groenlandsbanken AS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |