Correlation Between BAIGAI and Handelsinvest Danmark
Can any of the company-specific risk be diversified away by investing in both BAIGAI and Handelsinvest Danmark 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 BAIGAI and Handelsinvest Danmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investeringsforeningen Bankinvest and Handelsinvest Danmark, you can compare the effects of market volatilities on BAIGAI and Handelsinvest Danmark 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 BAIGAI with a short position of Handelsinvest Danmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIGAI and Handelsinvest Danmark.
Diversification Opportunities for BAIGAI and Handelsinvest Danmark
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BAIGAI and Handelsinvest is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Bankinv and Handelsinvest Danmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handelsinvest Danmark and BAIGAI 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 Investeringsforeningen Bankinvest are associated (or correlated) with Handelsinvest Danmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handelsinvest Danmark has no effect on the direction of BAIGAI i.e., BAIGAI and Handelsinvest Danmark go up and down completely randomly.
Pair Corralation between BAIGAI and Handelsinvest Danmark
Assuming the 90 days trading horizon Investeringsforeningen Bankinvest is expected to generate 0.79 times more return on investment than Handelsinvest Danmark. However, Investeringsforeningen Bankinvest is 1.27 times less risky than Handelsinvest Danmark. It trades about 0.12 of its potential returns per unit of risk. Handelsinvest Danmark is currently generating about -0.01 per unit of risk. If you would invest 10,788 in Investeringsforeningen Bankinvest on October 24, 2024 and sell it today you would earn a total of 3,925 from holding Investeringsforeningen Bankinvest or generate 36.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investeringsforeningen Bankinv vs. Handelsinvest Danmark
Performance |
| Timeline |
| Investeringsforeningen |
| Handelsinvest Danmark |
BAIGAI and Handelsinvest Danmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIGAI and Handelsinvest Danmark
The main advantage of trading using opposite BAIGAI and Handelsinvest Danmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIGAI position performs unexpectedly, Handelsinvest Danmark 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 Handelsinvest Danmark will offset losses from the drop in Handelsinvest Danmark's long position.The idea behind Investeringsforeningen Bankinvest and Handelsinvest Danmark 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.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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