Correlation Between Danske Invest and Alm Brand
Can any of the company-specific risk be diversified away by investing in both Danske Invest and Alm Brand 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 Invest and Alm Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Invest Danmark and Alm Brand, you can compare the effects of market volatilities on Danske Invest and Alm Brand 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 Invest with a short position of Alm Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Invest and Alm Brand.
Diversification Opportunities for Danske Invest and Alm Brand
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Danske and Alm is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Danske Invest Danmark and Alm Brand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alm Brand and Danske Invest 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 Invest Danmark are associated (or correlated) with Alm Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alm Brand has no effect on the direction of Danske Invest i.e., Danske Invest and Alm Brand go up and down completely randomly.
Pair Corralation between Danske Invest and Alm Brand
Assuming the 90 days trading horizon Danske Invest Danmark is expected to under-perform the Alm Brand. In addition to that, Danske Invest is 2.08 times more volatile than Alm Brand. It trades about -0.09 of its total potential returns per unit of risk. Alm Brand is currently generating about 0.42 per unit of volatility. If you would invest 1,492 in Alm Brand on December 1, 2024 and sell it today you would earn a total of 125.00 from holding Alm Brand or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Invest Danmark vs. Alm Brand
Performance |
| Timeline |
| Danske Invest Danmark |
| Alm Brand |
Danske Invest and Alm Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Invest and Alm Brand
The main advantage of trading using opposite Danske Invest and Alm Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Invest position performs unexpectedly, Alm Brand 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 Alm Brand will offset losses from the drop in Alm Brand's long position.| Danske Invest vs. BankInv Kort HY | Danske Invest vs. Djurslands Bank | Danske Invest vs. Fynske Bank AS | Danske Invest vs. FOM Technologies 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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