Correlation Between Djurslands Bank and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Djurslands Bank and PARKEN Sport 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 Djurslands Bank and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Djurslands Bank and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Djurslands Bank and PARKEN Sport 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 Djurslands Bank with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Djurslands Bank and PARKEN Sport.
Diversification Opportunities for Djurslands Bank and PARKEN Sport
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Djurslands and PARKEN is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Djurslands Bank and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta and Djurslands 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 Djurslands Bank are associated (or correlated) with PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Djurslands Bank i.e., Djurslands Bank and PARKEN Sport go up and down completely randomly.
Pair Corralation between Djurslands Bank and PARKEN Sport
Assuming the 90 days trading horizon Djurslands Bank is expected to generate 3.05 times less return on investment than PARKEN Sport. But when comparing it to its historical volatility, Djurslands Bank is 1.55 times less risky than PARKEN Sport. It trades about 0.09 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 12,650 in PARKEN Sport Entertainment on October 26, 2024 and sell it today you would earn a total of 1,050 from holding PARKEN Sport Entertainment or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Djurslands Bank vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Djurslands Bank |
| PARKEN Sport Enterta |
Djurslands Bank and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Djurslands Bank and PARKEN Sport
The main advantage of trading using opposite Djurslands Bank and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Djurslands Bank position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Djurslands Bank vs. Skjern Bank AS | Djurslands Bank vs. Lollands Bank | Djurslands Bank vs. Kreditbanken AS | Djurslands Bank vs. Fynske Bank AS |
| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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