Correlation Between CBrain AS and Djurslands Bank
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Djurslands 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 CBrain AS and Djurslands Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Djurslands Bank, you can compare the effects of market volatilities on CBrain AS and Djurslands 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 CBrain AS with a short position of Djurslands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Djurslands Bank.
Diversification Opportunities for CBrain AS and Djurslands Bank
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CBrain and Djurslands is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Djurslands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djurslands Bank and CBrain AS 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 cBrain AS are associated (or correlated) with Djurslands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Djurslands Bank has no effect on the direction of CBrain AS i.e., CBrain AS and Djurslands Bank go up and down completely randomly.
Pair Corralation between CBrain AS and Djurslands Bank
Assuming the 90 days trading horizon CBrain AS is expected to generate 1.55 times less return on investment than Djurslands Bank. In addition to that, CBrain AS is 2.72 times more volatile than Djurslands Bank. It trades about 0.02 of its total potential returns per unit of risk. Djurslands Bank is currently generating about 0.09 per unit of volatility. If you would invest 31,950 in Djurslands Bank on August 25, 2024 and sell it today you would earn a total of 19,550 from holding Djurslands Bank or generate 61.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
cBrain AS vs. Djurslands Bank
Performance |
| Timeline |
| cBrain AS |
| Djurslands Bank |
CBrain AS and Djurslands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and Djurslands Bank
The main advantage of trading using opposite CBrain AS and Djurslands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Djurslands 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 Djurslands Bank will offset losses from the drop in Djurslands Bank's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
| Djurslands Bank vs. Dataproces Group AS | Djurslands Bank vs. cBrain AS | Djurslands Bank vs. ALK Abell AS | Djurslands Bank vs. ChemoMetec 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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