Correlation Between BankInvest Optima and Formuepleje Mix
Can any of the company-specific risk be diversified away by investing in both BankInvest Optima and Formuepleje Mix 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 BankInvest Optima and Formuepleje Mix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankInvest Optima 30 and Formuepleje Mix Medium, you can compare the effects of market volatilities on BankInvest Optima and Formuepleje Mix 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 Optima with a short position of Formuepleje Mix. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Optima and Formuepleje Mix.
Diversification Opportunities for BankInvest Optima and Formuepleje Mix
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BankInvest and Formuepleje is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Optima 30 and Formuepleje Mix Medium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formuepleje Mix Medium and BankInvest Optima 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 Optima 30 are associated (or correlated) with Formuepleje Mix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formuepleje Mix Medium has no effect on the direction of BankInvest Optima i.e., BankInvest Optima and Formuepleje Mix go up and down completely randomly.
Pair Corralation between BankInvest Optima and Formuepleje Mix
Assuming the 90 days trading horizon BankInvest Optima is expected to generate 1.11 times less return on investment than Formuepleje Mix. But when comparing it to its historical volatility, BankInvest Optima 30 is 1.46 times less risky than Formuepleje Mix. It trades about 0.12 of its potential returns per unit of risk. Formuepleje Mix Medium is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 26,740 in Formuepleje Mix Medium on October 18, 2024 and sell it today you would earn a total of 2,940 from holding Formuepleje Mix Medium or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.1% |
| Values | Daily Returns |
BankInvest Optima 30 vs. Formuepleje Mix Medium
Performance |
| Timeline |
| BankInvest Optima |
| Formuepleje Mix Medium |
BankInvest Optima and Formuepleje Mix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankInvest Optima and Formuepleje Mix
The main advantage of trading using opposite BankInvest Optima and Formuepleje Mix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankInvest Optima position performs unexpectedly, Formuepleje Mix 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 Formuepleje Mix will offset losses from the drop in Formuepleje Mix's long position.| BankInvest Optima vs. Novo Nordisk AS | BankInvest Optima vs. Nordea Bank Abp | BankInvest Optima vs. DSV Panalpina AS | BankInvest Optima vs. AP Mller |
| Formuepleje Mix vs. Danske Andelskassers Bank | Formuepleje Mix vs. BankInvest Value Globale | Formuepleje Mix vs. Prime Office AS | Formuepleje Mix vs. Embla Medical hf |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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