Correlation Between BankIn Bredygt and Vestjysk Bank
Can any of the company-specific risk be diversified away by investing in both BankIn Bredygt and Vestjysk 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 BankIn Bredygt and Vestjysk Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankIn Bredygt Klimaakt and Vestjysk Bank AS, you can compare the effects of market volatilities on BankIn Bredygt and Vestjysk 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 BankIn Bredygt with a short position of Vestjysk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankIn Bredygt and Vestjysk Bank.
Diversification Opportunities for BankIn Bredygt and Vestjysk Bank
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BankIn and Vestjysk is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BankIn Bredygt Klimaakt and Vestjysk Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestjysk Bank AS and BankIn Bredygt 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 BankIn Bredygt Klimaakt are associated (or correlated) with Vestjysk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestjysk Bank AS has no effect on the direction of BankIn Bredygt i.e., BankIn Bredygt and Vestjysk Bank go up and down completely randomly.
Pair Corralation between BankIn Bredygt and Vestjysk Bank
Assuming the 90 days trading horizon BankIn Bredygt Klimaakt is expected to generate 1.63 times more return on investment than Vestjysk Bank. However, BankIn Bredygt is 1.63 times more volatile than Vestjysk Bank AS. It trades about 0.04 of its potential returns per unit of risk. Vestjysk Bank AS is currently generating about -0.18 per unit of risk. If you would invest 10,660 in BankIn Bredygt Klimaakt on August 29, 2024 and sell it today you would earn a total of 75.00 from holding BankIn Bredygt Klimaakt or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
BankIn Bredygt Klimaakt vs. Vestjysk Bank AS
Performance |
| Timeline |
| BankIn Bredygt Klimaakt |
| Vestjysk Bank AS |
BankIn Bredygt and Vestjysk Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankIn Bredygt and Vestjysk Bank
The main advantage of trading using opposite BankIn Bredygt and Vestjysk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankIn Bredygt position performs unexpectedly, Vestjysk 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 Vestjysk Bank will offset losses from the drop in Vestjysk Bank's long position.| BankIn Bredygt vs. Novo Nordisk AS | BankIn Bredygt vs. Nordea Bank Abp | BankIn Bredygt vs. DSV Panalpina AS | BankIn Bredygt vs. AP Mller |
| Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Jyske Bank AS | Vestjysk Bank vs. Alm Brand | Vestjysk Bank vs. Nordea Bank Abp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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