Correlation Between Danske Invest and Vestjysk Bank
Can any of the company-specific risk be diversified away by investing in both Danske Invest and Vestjysk Bank 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 Vestjysk Bank 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 Vestjysk Bank AS, you can compare the effects of market volatilities on Danske Invest and Vestjysk Bank 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 Vestjysk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Invest and Vestjysk Bank.
Diversification Opportunities for Danske Invest and Vestjysk Bank
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Danske and Vestjysk is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Danske Invest Danmark and Vestjysk Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestjysk Bank AS 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 Vestjysk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestjysk Bank AS has no effect on the direction of Danske Invest i.e., Danske Invest and Vestjysk Bank go up and down completely randomly.
Pair Corralation between Danske Invest and Vestjysk Bank
Assuming the 90 days trading horizon Danske Invest Danmark is expected to generate 1.0 times more return on investment than Vestjysk Bank. However, Danske Invest is 1.0 times more volatile than Vestjysk Bank AS. It trades about -0.11 of its potential returns per unit of risk. Vestjysk Bank AS is currently generating about -0.11 per unit of risk. If you would invest 15,030 in Danske Invest Danmark on September 2, 2024 and sell it today you would lose (820.00) from holding Danske Invest Danmark or give up 5.46% 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. Vestjysk Bank AS
Performance |
| Timeline |
| Danske Invest Danmark |
| Vestjysk Bank AS |
Danske Invest and Vestjysk Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Invest and Vestjysk Bank
The main advantage of trading using opposite Danske Invest and Vestjysk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Invest position performs unexpectedly, Vestjysk Bank 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 Vestjysk Bank will offset losses from the drop in Vestjysk Bank'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 |
| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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