Correlation Between Danske Bank and Matas AS
Can any of the company-specific risk be diversified away by investing in both Danske Bank and Matas AS 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 Matas AS 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 Matas AS, you can compare the effects of market volatilities on Danske Bank and Matas AS 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 Matas AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and Matas AS.
Diversification Opportunities for Danske Bank and Matas AS
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Danske and Matas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and Matas AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matas 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 Matas AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matas AS has no effect on the direction of Danske Bank i.e., Danske Bank and Matas AS go up and down completely randomly.
Pair Corralation between Danske Bank and Matas AS
Assuming the 90 days trading horizon Danske Bank is expected to generate 1.02 times less return on investment than Matas AS. But when comparing it to its historical volatility, Danske Bank AS is 1.18 times less risky than Matas AS. It trades about 0.08 of its potential returns per unit of risk. Matas AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,197 in Matas AS on November 2, 2024 and sell it today you would earn a total of 5,603 from holding Matas AS or generate 68.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Bank AS vs. Matas AS
Performance |
| Timeline |
| Danske Bank AS |
| Matas AS |
Danske Bank and Matas AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and Matas AS
The main advantage of trading using opposite Danske Bank and Matas AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Bank position performs unexpectedly, Matas AS 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 Matas AS will offset losses from the drop in Matas AS'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 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |