Correlation Between BankInvest Virksomhedsoblig and BankInvest Lange
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By analyzing existing cross correlation between BankInvest Virksomhedsobligationer and BankInvest Lange Danske, you can compare the effects of market volatilities on BankInvest Virksomhedsoblig and BankInvest Lange 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 BankInvest Virksomhedsoblig with a short position of BankInvest Lange. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Virksomhedsoblig and BankInvest Lange.
Diversification Opportunities for BankInvest Virksomhedsoblig and BankInvest Lange
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BankInvest and BankInvest is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Virksomhedsobliga and BankInvest Lange Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Lange Danske and BankInvest Virksomhedsoblig 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 BankInvest Virksomhedsobligationer are associated (or correlated) with BankInvest Lange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Lange Danske has no effect on the direction of BankInvest Virksomhedsoblig i.e., BankInvest Virksomhedsoblig and BankInvest Lange go up and down completely randomly.
Pair Corralation between BankInvest Virksomhedsoblig and BankInvest Lange
Assuming the 90 days trading horizon BankInvest Virksomhedsobligationer is expected to under-perform the BankInvest Lange. In addition to that, BankInvest Virksomhedsoblig is 1.14 times more volatile than BankInvest Lange Danske. It trades about -0.28 of its total potential returns per unit of risk. BankInvest Lange Danske is currently generating about -0.05 per unit of volatility. If you would invest 8,904 in BankInvest Lange Danske on October 22, 2024 and sell it today you would lose (18.00) from holding BankInvest Lange Danske or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.5% |
| Values | Daily Returns |
BankInvest Virksomhedsobliga vs. BankInvest Lange Danske
Performance |
| Timeline |
| BankInvest Virksomhedsoblig |
| BankInvest Lange Danske |
BankInvest Virksomhedsoblig and BankInvest Lange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankInvest Virksomhedsoblig and BankInvest Lange
The main advantage of trading using opposite BankInvest Virksomhedsoblig and BankInvest Lange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankInvest Virksomhedsoblig position performs unexpectedly, BankInvest Lange 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 BankInvest Lange will offset losses from the drop in BankInvest Lange's long position.The idea behind BankInvest Virksomhedsobligationer and BankInvest Lange Danske 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.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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