Correlation Between Danske Bank and First Reliance
Can any of the company-specific risk be diversified away by investing in both Danske Bank and First Reliance 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 Bank and First Reliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Bank AS and First Reliance Bancshares, you can compare the effects of market volatilities on Danske Bank and First Reliance 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 Bank with a short position of First Reliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and First Reliance.
Diversification Opportunities for Danske Bank and First Reliance
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Danske and First is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and First Reliance Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Reliance Bancshares and Danske Bank 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 Bank AS are associated (or correlated) with First Reliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Reliance Bancshares has no effect on the direction of Danske Bank i.e., Danske Bank and First Reliance go up and down completely randomly.
Pair Corralation between Danske Bank and First Reliance
Assuming the 90 days horizon Danske Bank AS is expected to under-perform the First Reliance. In addition to that, Danske Bank is 1.52 times more volatile than First Reliance Bancshares. It trades about -0.02 of its total potential returns per unit of risk. First Reliance Bancshares is currently generating about 0.16 per unit of volatility. If you would invest 805.00 in First Reliance Bancshares on September 1, 2024 and sell it today you would earn a total of 170.00 from holding First Reliance Bancshares or generate 21.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Bank AS vs. First Reliance Bancshares
Performance |
| Timeline |
| Danske Bank AS |
| First Reliance Bancshares |
Danske Bank and First Reliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and First Reliance
The main advantage of trading using opposite Danske Bank and First Reliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Bank position performs unexpectedly, First Reliance 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 First Reliance will offset losses from the drop in First Reliance's long position.| Danske Bank vs. Israel Discount Bank | Danske Bank vs. Baraboo Bancorporation | Danske Bank vs. Schweizerische Nationalbank | Danske Bank vs. Jyske Bank AS |
| First Reliance vs. FNB Inc | First Reliance vs. Apollo Bancorp | First Reliance vs. Commercial National Financial | First Reliance vs. Community Bankers |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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