Correlation Between Danske Bank and Konsolidator
Can any of the company-specific risk be diversified away by investing in both Danske Bank and Konsolidator 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 Bank and Konsolidator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Bank AS and Konsolidator AS, you can compare the effects of market volatilities on Danske Bank and Konsolidator 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 Bank with a short position of Konsolidator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and Konsolidator.
Diversification Opportunities for Danske Bank and Konsolidator
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Danske and Konsolidator is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and Konsolidator AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konsolidator AS and Danske Bank 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 Bank AS are associated (or correlated) with Konsolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konsolidator AS has no effect on the direction of Danske Bank i.e., Danske Bank and Konsolidator go up and down completely randomly.
Pair Corralation between Danske Bank and Konsolidator
Assuming the 90 days trading horizon Danske Bank AS is expected to generate 0.37 times more return on investment than Konsolidator. However, Danske Bank AS is 2.67 times less risky than Konsolidator. It trades about 0.25 of its potential returns per unit of risk. Konsolidator AS is currently generating about -0.17 per unit of risk. If you would invest 20,550 in Danske Bank AS on October 25, 2024 and sell it today you would earn a total of 890.00 from holding Danske Bank AS or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Bank AS vs. Konsolidator AS
Performance |
| Timeline |
| Danske Bank AS |
| Konsolidator AS |
Danske Bank and Konsolidator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and Konsolidator
The main advantage of trading using opposite Danske Bank and Konsolidator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Bank position performs unexpectedly, Konsolidator 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 Konsolidator will offset losses from the drop in Konsolidator's long position.| Danske Bank vs. Bavarian Nordic | Danske Bank vs. DSV Panalpina AS | Danske Bank vs. Vestas Wind Systems | Danske Bank vs. Ambu AS |
| Konsolidator vs. Skjern Bank AS | Konsolidator vs. Strategic Investments AS | Konsolidator vs. Vestjysk Bank AS | Konsolidator vs. Scandinavian Investment Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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