Correlation Between MFS Investment and Danske Bank
Can any of the company-specific risk be diversified away by investing in both MFS Investment 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 MFS Investment and Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Investment Grade and Danske Bank AS, you can compare the effects of market volatilities on MFS Investment 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 MFS Investment with a short position of Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Danske Bank.
Diversification Opportunities for MFS Investment and Danske Bank
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFS and Danske is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade 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 MFS Investment 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 MFS Investment Grade 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 MFS Investment i.e., MFS Investment and Danske Bank go up and down completely randomly.
Pair Corralation between MFS Investment and Danske Bank
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.33 times more return on investment than Danske Bank. However, MFS Investment Grade is 3.01 times less risky than Danske Bank. It trades about 0.19 of its potential returns per unit of risk. Danske Bank AS is currently generating about -0.06 per unit of risk. If you would invest 801.00 in MFS Investment Grade on August 31, 2024 and sell it today you would earn a total of 20.00 from holding MFS Investment Grade or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Danske Bank AS
Performance |
| Timeline |
| MFS Investment Grade |
| Danske Bank AS |
MFS Investment and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Danske Bank
The main advantage of trading using opposite MFS Investment and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment 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.| MFS Investment vs. HUMANA INC | MFS Investment vs. SCOR PK | MFS Investment vs. Aquagold International | MFS Investment vs. Thrivent High Yield |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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