Correlation Between Aozora Bank and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Danske 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 Aozora Bank and Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank Ltd and Danske Bank AS, you can compare the effects of market volatilities on Aozora Bank and Danske 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 Aozora Bank with a short position of Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Danske Bank.
Diversification Opportunities for Aozora Bank and Danske Bank
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aozora and Danske is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank Ltd and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS and Aozora 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 Aozora Bank Ltd are associated (or correlated) with Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Aozora Bank i.e., Aozora Bank and Danske Bank go up and down completely randomly.
Pair Corralation between Aozora Bank and Danske Bank
If you would invest 1,438 in Danske Bank AS on November 9, 2024 and sell it today you would earn a total of 85.00 from holding Danske Bank AS or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank Ltd vs. Danske Bank AS
Performance |
| Timeline |
| Aozora Bank |
| Danske Bank AS |
Aozora Bank and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Danske Bank
The main advantage of trading using opposite Aozora Bank and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Danske 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 Danske Bank will offset losses from the drop in Danske Bank's long position.The idea behind Aozora Bank Ltd and Danske 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.| Danske Bank vs. Israel Discount Bank | Danske Bank vs. Baraboo Bancorporation | Danske Bank vs. Schweizerische Nationalbank | Danske Bank vs. Jyske Bank 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |