Correlation Between Danske Bank and Moens Bank
Can any of the company-specific risk be diversified away by investing in both Danske Bank and Moens 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 Bank and Moens Bank 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 Moens Bank AS, you can compare the effects of market volatilities on Danske Bank and Moens 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 Bank with a short position of Moens Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and Moens Bank.
Diversification Opportunities for Danske Bank and Moens Bank
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Danske and Moens is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and Moens Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moens Bank 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 Moens Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moens Bank AS has no effect on the direction of Danske Bank i.e., Danske Bank and Moens Bank go up and down completely randomly.
Pair Corralation between Danske Bank and Moens Bank
Assuming the 90 days trading horizon Danske Bank AS is expected to generate 1.13 times more return on investment than Moens Bank. However, Danske Bank is 1.13 times more volatile than Moens Bank AS. It trades about 0.1 of its potential returns per unit of risk. Moens Bank AS is currently generating about 0.02 per unit of risk. If you would invest 12,460 in Danske Bank AS on September 19, 2024 and sell it today you would earn a total of 7,900 from holding Danske Bank AS or generate 63.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Bank AS vs. Moens Bank AS
Performance |
| Timeline |
| Danske Bank AS |
| Moens Bank AS |
Danske Bank and Moens Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and Moens Bank
The main advantage of trading using opposite Danske Bank and Moens Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Bank position performs unexpectedly, Moens 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 Moens Bank will offset losses from the drop in Moens Bank'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 |
| Moens Bank vs. FLSmidth Co | Moens Bank vs. Danske Bank AS | Moens Bank vs. ISS AS | Moens Bank vs. DSV Panalpina 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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