Correlation Between Bank of Utica and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Bank of Utica and Danske 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 Bank of Utica and Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Utica and Danske Bank AS, you can compare the effects of market volatilities on Bank of Utica and Danske 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 Bank of Utica with a short position of Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Utica and Danske Bank.
Diversification Opportunities for Bank of Utica and Danske Bank
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Danske is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS and Bank of Utica 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 Bank of Utica are associated (or correlated) with Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Bank of Utica i.e., Bank of Utica and Danske Bank go up and down completely randomly.
Pair Corralation between Bank of Utica and Danske Bank
Given the investment horizon of 90 days Bank of Utica is expected to generate 0.63 times more return on investment than Danske Bank. However, Bank of Utica is 1.6 times less risky than Danske Bank. It trades about 0.34 of its potential returns per unit of risk. Danske Bank AS is currently generating about -0.05 per unit of risk. If you would invest 45,000 in Bank of Utica on August 30, 2024 and sell it today you would earn a total of 3,800 from holding Bank of Utica or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank of Utica vs. Danske Bank AS
Performance |
| Timeline |
| Bank of Utica |
| Danske Bank AS |
Bank of Utica and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Utica and Danske Bank
The main advantage of trading using opposite Bank of Utica and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica position performs unexpectedly, Danske 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 Danske Bank will offset losses from the drop in Danske Bank's long position.| Bank of Utica vs. Israel Discount Bank | Bank of Utica vs. Danske Bank AS | Bank of Utica vs. Absa Group Limited |
| Danske Bank vs. Israel Discount Bank | Danske Bank vs. Baraboo Bancorporation | Danske Bank vs. Schweizerische Nationalbank | Danske Bank vs. Jyske Bank AS |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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