Correlation Between Danske Invest and Groenlandsbanken
Can any of the company-specific risk be diversified away by investing in both Danske Invest and Groenlandsbanken 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 Groenlandsbanken 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 Groenlandsbanken AS, you can compare the effects of market volatilities on Danske Invest and Groenlandsbanken 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 Groenlandsbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Invest and Groenlandsbanken.
Diversification Opportunities for Danske Invest and Groenlandsbanken
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Danske and Groenlandsbanken is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Danske Invest Danmark and Groenlandsbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groenlandsbanken 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 Groenlandsbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groenlandsbanken has no effect on the direction of Danske Invest i.e., Danske Invest and Groenlandsbanken go up and down completely randomly.
Pair Corralation between Danske Invest and Groenlandsbanken
Assuming the 90 days trading horizon Danske Invest Danmark is expected to under-perform the Groenlandsbanken. But the stock apears to be less risky and, when comparing its historical volatility, Danske Invest Danmark is 1.09 times less risky than Groenlandsbanken. The stock trades about -0.1 of its potential returns per unit of risk. The Groenlandsbanken AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 66,500 in Groenlandsbanken AS on September 3, 2024 and sell it today you would earn a total of 3,500 from holding Groenlandsbanken AS or generate 5.26% 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. Groenlandsbanken AS
Performance |
| Timeline |
| Danske Invest Danmark |
| Groenlandsbanken |
Danske Invest and Groenlandsbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Invest and Groenlandsbanken
The main advantage of trading using opposite Danske Invest and Groenlandsbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Invest position performs unexpectedly, Groenlandsbanken 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 Groenlandsbanken will offset losses from the drop in Groenlandsbanken's long position.| Danske Invest vs. Groenlandsbanken AS | Danske Invest vs. Prime Office AS | Danske Invest vs. Jyske Bank AS | Danske Invest vs. Kreditbanken AS |
| Groenlandsbanken vs. Skjern Bank AS | Groenlandsbanken vs. Lollands Bank | Groenlandsbanken vs. Ringkjoebing Landbobank AS | Groenlandsbanken vs. Kreditbanken 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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