Correlation Between Bavarian Nordic and Maj Invest
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and Maj Invest 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 Bavarian Nordic and Maj Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and Maj Invest Emerging, you can compare the effects of market volatilities on Bavarian Nordic and Maj Invest 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 Bavarian Nordic with a short position of Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Maj Invest.
Diversification Opportunities for Bavarian Nordic and Maj Invest
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bavarian and Maj is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Maj Invest Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Emerging and Bavarian Nordic 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 Bavarian Nordic are associated (or correlated) with Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Emerging has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Maj Invest go up and down completely randomly.
Pair Corralation between Bavarian Nordic and Maj Invest
Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 2.96 times more return on investment than Maj Invest. However, Bavarian Nordic is 2.96 times more volatile than Maj Invest Emerging. It trades about 0.02 of its potential returns per unit of risk. Maj Invest Emerging is currently generating about 0.05 per unit of risk. If you would invest 18,075 in Bavarian Nordic on September 5, 2024 and sell it today you would earn a total of 525.00 from holding Bavarian Nordic or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Bavarian Nordic vs. Maj Invest Emerging
Performance |
| Timeline |
| Bavarian Nordic |
| Maj Invest Emerging |
Bavarian Nordic and Maj Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and Maj Invest
The main advantage of trading using opposite Bavarian Nordic and Maj Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, Maj Invest 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 Maj Invest will offset losses from the drop in Maj Invest's long position.| Bavarian Nordic vs. Ambu AS | Bavarian Nordic vs. Danske Bank AS | Bavarian Nordic vs. Genmab AS | Bavarian Nordic vs. DSV Panalpina AS |
| Maj Invest vs. Bavarian Nordic | Maj Invest vs. Investeringsselskabet Luxor AS | Maj Invest vs. cBrain AS | Maj Invest vs. Fast Ejendom |
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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