Correlation Between Danske Bank and LUXOR-B
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By analyzing existing cross correlation between Danske Bank AS and Investeringsselskabet Luxor AS, you can compare the effects of market volatilities on Danske Bank and LUXOR-B 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 LUXOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and LUXOR-B.
Diversification Opportunities for Danske Bank and LUXOR-B
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Danske and LUXOR-B is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and Investeringsselskabet Luxor AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsselskabet 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 LUXOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsselskabet has no effect on the direction of Danske Bank i.e., Danske Bank and LUXOR-B go up and down completely randomly.
Pair Corralation between Danske Bank and LUXOR-B
Assuming the 90 days trading horizon Danske Bank AS is expected to generate 0.81 times more return on investment than LUXOR-B. However, Danske Bank AS is 1.23 times less risky than LUXOR-B. It trades about 0.08 of its potential returns per unit of risk. Investeringsselskabet Luxor AS is currently generating about -0.03 per unit of risk. If you would invest 11,420 in Danske Bank AS on September 1, 2024 and sell it today you would earn a total of 8,850 from holding Danske Bank AS or generate 77.5% 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. Investeringsselskabet Luxor AS
Performance |
| Timeline |
| Danske Bank AS |
| Investeringsselskabet |
Danske Bank and LUXOR-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and LUXOR-B
The main advantage of trading using opposite Danske Bank and LUXOR-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Bank position performs unexpectedly, LUXOR-B 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 LUXOR-B will offset losses from the drop in LUXOR-B'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 |
| LUXOR-B vs. Skjern Bank AS | LUXOR-B vs. Groenlandsbanken AS | LUXOR-B vs. Fynske Bank AS | LUXOR-B vs. Lollands Bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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