Correlation Between Danske Invest and HH International
Can any of the company-specific risk be diversified away by investing in both Danske Invest and HH International 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 HH International 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 HH International AS, you can compare the effects of market volatilities on Danske Invest and HH International 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 HH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Invest and HH International.
Diversification Opportunities for Danske Invest and HH International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Danske and HH International is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Danske Invest Danmark and HH International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HH International 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 HH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HH International has no effect on the direction of Danske Invest i.e., Danske Invest and HH International go up and down completely randomly.
Pair Corralation between Danske Invest and HH International
Assuming the 90 days trading horizon Danske Invest Danmark is expected to generate 0.48 times more return on investment than HH International. However, Danske Invest Danmark is 2.1 times less risky than HH International. It trades about -0.01 of its potential returns per unit of risk. HH International AS is currently generating about -0.01 per unit of risk. If you would invest 15,636 in Danske Invest Danmark on August 29, 2024 and sell it today you would lose (1,501) from holding Danske Invest Danmark or give up 9.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Invest Danmark vs. HH International AS
Performance |
| Timeline |
| Danske Invest Danmark |
| HH International |
Danske Invest and HH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Invest and HH International
The main advantage of trading using opposite Danske Invest and HH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Invest position performs unexpectedly, HH International 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 HH International will offset losses from the drop in HH International's long position.| Danske Invest vs. Novo Nordisk AS | Danske Invest vs. Nordea Bank Abp | Danske Invest vs. DSV Panalpina AS | Danske Invest vs. AP Mller |
| HH International vs. Flgger group AS | HH International vs. SKAKO AS | HH International vs. Solar AS | HH International vs. Brd Klee 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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