Correlation Between Danske Andelskassers and Hvidbjerg Bank
Can any of the company-specific risk be diversified away by investing in both Danske Andelskassers and Hvidbjerg 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 Danske Andelskassers and Hvidbjerg Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Andelskassers Bank and Hvidbjerg Bank, you can compare the effects of market volatilities on Danske Andelskassers and Hvidbjerg 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 Danske Andelskassers with a short position of Hvidbjerg Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Andelskassers and Hvidbjerg Bank.
Diversification Opportunities for Danske Andelskassers and Hvidbjerg Bank
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Danske and Hvidbjerg is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Danske Andelskassers Bank and Hvidbjerg Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hvidbjerg Bank and Danske Andelskassers 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 Danske Andelskassers Bank are associated (or correlated) with Hvidbjerg Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hvidbjerg Bank has no effect on the direction of Danske Andelskassers i.e., Danske Andelskassers and Hvidbjerg Bank go up and down completely randomly.
Pair Corralation between Danske Andelskassers and Hvidbjerg Bank
Assuming the 90 days trading horizon Danske Andelskassers Bank is expected to under-perform the Hvidbjerg Bank. But the stock apears to be less risky and, when comparing its historical volatility, Danske Andelskassers Bank is 1.5 times less risky than Hvidbjerg Bank. The stock trades about -0.06 of its potential returns per unit of risk. The Hvidbjerg Bank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 11,300 in Hvidbjerg Bank on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Hvidbjerg Bank or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Andelskassers Bank vs. Hvidbjerg Bank
Performance |
| Timeline |
| Danske Andelskassers Bank |
| Hvidbjerg Bank |
Danske Andelskassers and Hvidbjerg Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Andelskassers and Hvidbjerg Bank
The main advantage of trading using opposite Danske Andelskassers and Hvidbjerg Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Andelskassers position performs unexpectedly, Hvidbjerg 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 Hvidbjerg Bank will offset losses from the drop in Hvidbjerg Bank's long position.| Danske Andelskassers vs. Vestjysk Bank AS | Danske Andelskassers vs. Spar Nord Bank | Danske Andelskassers vs. Skjern Bank AS | Danske Andelskassers vs. RTX AS |
| Hvidbjerg Bank vs. Skjern Bank AS | Hvidbjerg Bank vs. Lollands Bank | Hvidbjerg Bank vs. Djurslands Bank | Hvidbjerg Bank vs. Nordfyns 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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