Correlation Between DFDS AS and Copenhagen Airports
Can any of the company-specific risk be diversified away by investing in both DFDS AS and Copenhagen Airports 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 DFDS AS and Copenhagen Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFDS AS and Copenhagen Airports AS, you can compare the effects of market volatilities on DFDS AS and Copenhagen Airports 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 DFDS AS with a short position of Copenhagen Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFDS AS and Copenhagen Airports.
Diversification Opportunities for DFDS AS and Copenhagen Airports
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DFDS and Copenhagen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and Copenhagen Airports AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copenhagen Airports and DFDS AS 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 DFDS AS are associated (or correlated) with Copenhagen Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copenhagen Airports has no effect on the direction of DFDS AS i.e., DFDS AS and Copenhagen Airports go up and down completely randomly.
Pair Corralation between DFDS AS and Copenhagen Airports
Assuming the 90 days trading horizon DFDS AS is expected to under-perform the Copenhagen Airports. In addition to that, DFDS AS is 1.1 times more volatile than Copenhagen Airports AS. It trades about -0.18 of its total potential returns per unit of risk. Copenhagen Airports AS is currently generating about -0.11 per unit of volatility. If you would invest 475,000 in Copenhagen Airports AS on August 30, 2024 and sell it today you would lose (105,000) from holding Copenhagen Airports AS or give up 22.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFDS AS vs. Copenhagen Airports AS
Performance |
| Timeline |
| DFDS AS |
| Copenhagen Airports |
DFDS AS and Copenhagen Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFDS AS and Copenhagen Airports
The main advantage of trading using opposite DFDS AS and Copenhagen Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFDS AS position performs unexpectedly, Copenhagen Airports 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 Copenhagen Airports will offset losses from the drop in Copenhagen Airports' long position.| DFDS AS vs. FLSmidth Co | DFDS AS vs. NKT AS | DFDS AS vs. Dampskibsselskabet Norden AS | DFDS AS vs. GN Store Nord |
| Copenhagen Airports vs. GN Store Nord | Copenhagen Airports vs. DSV Panalpina AS | Copenhagen Airports vs. ISS AS | Copenhagen Airports 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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