Correlation Between DKIJAP and Maj Invest
Can any of the company-specific risk be diversified away by investing in both DKIJAP and Maj Invest 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 Maj Invest 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 Maj Invest Pension, you can compare the effects of market volatilities on DKIJAP and Maj Invest 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 Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKIJAP and Maj Invest.
Diversification Opportunities for DKIJAP and Maj Invest
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DKIJAP and Maj is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and Maj Invest Pension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Pension 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Pension has no effect on the direction of DKIJAP i.e., DKIJAP and Maj Invest go up and down completely randomly.
Pair Corralation between DKIJAP and Maj Invest
Assuming the 90 days trading horizon Investeringsforeningen Danske Invest is expected to under-perform the Maj Invest. In addition to that, DKIJAP is 2.15 times more volatile than Maj Invest Pension. It trades about -0.26 of its total potential returns per unit of risk. Maj Invest Pension is currently generating about -0.49 per unit of volatility. If you would invest 11,473 in Maj Invest Pension on December 11, 2024 and sell it today you would lose (488.00) from holding Maj Invest Pension or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investeringsforeningen Danske vs. Maj Invest Pension
Performance |
| Timeline |
| Investeringsforeningen |
| Maj Invest Pension |
DKIJAP and Maj Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DKIJAP and Maj Invest
The main advantage of trading using opposite DKIJAP and Maj Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DKIJAP position performs unexpectedly, Maj Invest 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 Maj Invest will offset losses from the drop in Maj Invest's long position.| DKIJAP vs. PARKEN Sport Entertainment | ||
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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