Correlation Between Carnegie Wealth and Djurslands Bank
Can any of the company-specific risk be diversified away by investing in both Carnegie Wealth 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 Carnegie Wealth and Djurslands Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Wealth Management and Djurslands Bank, you can compare the effects of market volatilities on Carnegie Wealth 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 Carnegie Wealth with a short position of Djurslands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Wealth and Djurslands Bank.
Diversification Opportunities for Carnegie Wealth and Djurslands Bank
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carnegie and Djurslands is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Wealth Management and Djurslands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djurslands Bank and Carnegie Wealth 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 Carnegie Wealth Management 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 Carnegie Wealth i.e., Carnegie Wealth and Djurslands Bank go up and down completely randomly.
Pair Corralation between Carnegie Wealth and Djurslands Bank
Assuming the 90 days trading horizon Carnegie Wealth Management is expected to generate 0.87 times more return on investment than Djurslands Bank. However, Carnegie Wealth Management is 1.14 times less risky than Djurslands Bank. It trades about 0.08 of its potential returns per unit of risk. Djurslands Bank is currently generating about 0.05 per unit of risk. If you would invest 10,130 in Carnegie Wealth Management on September 1, 2024 and sell it today you would earn a total of 2,440 from holding Carnegie Wealth Management or generate 24.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.52% |
| Values | Daily Returns |
Carnegie Wealth Management vs. Djurslands Bank
Performance |
| Timeline |
| Carnegie Wealth Mana |
| Djurslands Bank |
Carnegie Wealth and Djurslands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Wealth and Djurslands Bank
The main advantage of trading using opposite Carnegie Wealth and Djurslands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Wealth 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.| Carnegie Wealth vs. Novo Nordisk AS | Carnegie Wealth vs. Nordea Bank Abp | Carnegie Wealth vs. DSV Panalpina AS | Carnegie Wealth vs. AP Mller |
| Djurslands Bank vs. Skjern Bank AS | Djurslands Bank vs. Lollands Bank | Djurslands Bank vs. Kreditbanken AS | Djurslands Bank vs. Fynske 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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