Correlation Between DKIJAP and Djurslands Bank
Can any of the company-specific risk be diversified away by investing in both DKIJAP and Djurslands 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 DKIJAP and Djurslands Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investeringsforeningen Danske Invest and Djurslands Bank, you can compare the effects of market volatilities on DKIJAP and Djurslands 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 DKIJAP with a short position of Djurslands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKIJAP and Djurslands Bank.
Diversification Opportunities for DKIJAP and Djurslands Bank
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DKIJAP and Djurslands is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and Djurslands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djurslands Bank and DKIJAP 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 Investeringsforeningen Danske Invest are associated (or correlated) with Djurslands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Djurslands Bank has no effect on the direction of DKIJAP i.e., DKIJAP and Djurslands Bank go up and down completely randomly.
Pair Corralation between DKIJAP and Djurslands Bank
Assuming the 90 days trading horizon Investeringsforeningen Danske Invest is expected to generate 1.31 times more return on investment than Djurslands Bank. However, DKIJAP is 1.31 times more volatile than Djurslands Bank. It trades about 0.12 of its potential returns per unit of risk. Djurslands Bank is currently generating about -0.09 per unit of risk. If you would invest 13,345 in Investeringsforeningen Danske Invest on August 25, 2024 and sell it today you would earn a total of 438.00 from holding Investeringsforeningen Danske Invest or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investeringsforeningen Danske vs. Djurslands Bank
Performance |
| Timeline |
| Investeringsforeningen |
| Djurslands Bank |
DKIJAP and Djurslands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DKIJAP and Djurslands Bank
The main advantage of trading using opposite DKIJAP and Djurslands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DKIJAP position performs unexpectedly, Djurslands 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 Djurslands Bank will offset losses from the drop in Djurslands Bank's long position.The idea behind Investeringsforeningen Danske Invest and Djurslands Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Djurslands Bank vs. Dataproces Group AS | Djurslands Bank vs. cBrain AS | Djurslands Bank vs. ALK Abell AS | Djurslands Bank vs. ChemoMetec 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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