Correlation Between Danske Andelskassers and Skjern Bank
Can any of the company-specific risk be diversified away by investing in both Danske Andelskassers and Skjern 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 Skjern 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 Skjern Bank AS, you can compare the effects of market volatilities on Danske Andelskassers and Skjern 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 Skjern Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Andelskassers and Skjern Bank.
Diversification Opportunities for Danske Andelskassers and Skjern Bank
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Danske and Skjern is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Danske Andelskassers Bank and Skjern Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skjern Bank AS 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 Skjern Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skjern Bank AS has no effect on the direction of Danske Andelskassers i.e., Danske Andelskassers and Skjern Bank go up and down completely randomly.
Pair Corralation between Danske Andelskassers and Skjern Bank
Assuming the 90 days trading horizon Danske Andelskassers Bank is expected to generate 1.16 times more return on investment than Skjern Bank. However, Danske Andelskassers is 1.16 times more volatile than Skjern Bank AS. It trades about 0.11 of its potential returns per unit of risk. Skjern Bank AS is currently generating about 0.08 per unit of risk. If you would invest 1,370 in Danske Andelskassers Bank on October 19, 2024 and sell it today you would earn a total of 65.00 from holding Danske Andelskassers Bank or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Andelskassers Bank vs. Skjern Bank AS
Performance |
| Timeline |
| Danske Andelskassers Bank |
| Skjern Bank AS |
Danske Andelskassers and Skjern Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Andelskassers and Skjern Bank
The main advantage of trading using opposite Danske Andelskassers and Skjern Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Andelskassers position performs unexpectedly, Skjern 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 Skjern Bank will offset losses from the drop in Skjern 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 |
| Skjern Bank vs. PARKEN Sport Entertainment | Skjern Bank vs. Danske Andelskassers Bank | Skjern Bank vs. Fynske Bank AS | Skjern 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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