Correlation Between Danske Invest and Alefarm Brewing
Can any of the company-specific risk be diversified away by investing in both Danske Invest and Alefarm Brewing 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 Alefarm Brewing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Invest Europa and Alefarm Brewing AS, you can compare the effects of market volatilities on Danske Invest and Alefarm Brewing 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 Alefarm Brewing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Invest and Alefarm Brewing.
Diversification Opportunities for Danske Invest and Alefarm Brewing
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Danske and Alefarm is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Danske Invest Europa and Alefarm Brewing AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alefarm Brewing 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 Europa are associated (or correlated) with Alefarm Brewing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alefarm Brewing AS has no effect on the direction of Danske Invest i.e., Danske Invest and Alefarm Brewing go up and down completely randomly.
Pair Corralation between Danske Invest and Alefarm Brewing
Assuming the 90 days trading horizon Danske Invest is expected to generate 6.49 times less return on investment than Alefarm Brewing. But when comparing it to its historical volatility, Danske Invest Europa is 8.25 times less risky than Alefarm Brewing. It trades about 0.04 of its potential returns per unit of risk. Alefarm Brewing AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Alefarm Brewing AS on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Alefarm Brewing AS or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Danske Invest Europa vs. Alefarm Brewing AS
Performance |
| Timeline |
| Danske Invest Europa |
| Alefarm Brewing AS |
Danske Invest and Alefarm Brewing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Invest and Alefarm Brewing
The main advantage of trading using opposite Danske Invest and Alefarm Brewing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Invest position performs unexpectedly, Alefarm Brewing 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 Alefarm Brewing will offset losses from the drop in Alefarm Brewing's long position.| Danske Invest vs. Prime Office AS | Danske Invest vs. BankInvest Value Globale | Danske Invest vs. Carnegie Wealth Management | Danske Invest vs. Sydbank AS |
| Alefarm Brewing vs. Bavarian Nordic | Alefarm Brewing vs. Investeringsselskabet Luxor AS | Alefarm Brewing vs. cBrain AS | Alefarm Brewing vs. Fast Ejendom |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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