Correlation Between DKIJAP and PFA Invest
Can any of the company-specific risk be diversified away by investing in both DKIJAP and PFA 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 PFA 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 PFA Invest Kreditobligationer, you can compare the effects of market volatilities on DKIJAP and PFA 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 PFA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKIJAP and PFA Invest.
Diversification Opportunities for DKIJAP and PFA Invest
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DKIJAP and PFA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and PFA Invest Kreditobligationer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFA Invest Kreditobl 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 PFA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFA Invest Kreditobl has no effect on the direction of DKIJAP i.e., DKIJAP and PFA Invest go up and down completely randomly.
Pair Corralation between DKIJAP and PFA Invest
Assuming the 90 days trading horizon Investeringsforeningen Danske Invest is expected to generate 13.06 times more return on investment than PFA Invest. However, DKIJAP is 13.06 times more volatile than PFA Invest Kreditobligationer. It trades about 0.1 of its potential returns per unit of risk. PFA Invest Kreditobligationer is currently generating about 0.14 per unit of risk. If you would invest 13,448 in Investeringsforeningen Danske Invest on August 27, 2024 and sell it today you would earn a total of 335.00 from holding Investeringsforeningen Danske Invest or generate 2.49% 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. PFA Invest Kreditobligationer
Performance |
| Timeline |
| Investeringsforeningen |
| PFA Invest Kreditobl |
DKIJAP and PFA Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DKIJAP and PFA Invest
The main advantage of trading using opposite DKIJAP and PFA Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DKIJAP position performs unexpectedly, PFA 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 PFA Invest will offset losses from the drop in PFA Invest's long position.The idea behind Investeringsforeningen Danske Invest and PFA Invest Kreditobligationer 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.| PFA Invest vs. BankIn Bredygt Klimaakt | PFA Invest vs. Nordfyns Bank AS | PFA Invest vs. Alefarm Brewing AS | PFA Invest vs. Spar Nord Bank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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