Correlation Between DSV Panalpina and Lollands Bank
Can any of the company-specific risk be diversified away by investing in both DSV Panalpina and Lollands 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 DSV Panalpina and Lollands Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSV Panalpina AS and Lollands Bank, you can compare the effects of market volatilities on DSV Panalpina and Lollands 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 DSV Panalpina with a short position of Lollands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and Lollands Bank.
Diversification Opportunities for DSV Panalpina and Lollands Bank
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DSV and Lollands is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Lollands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lollands Bank and DSV Panalpina 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 DSV Panalpina AS are associated (or correlated) with Lollands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lollands Bank has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Lollands Bank go up and down completely randomly.
Pair Corralation between DSV Panalpina and Lollands Bank
Assuming the 90 days trading horizon DSV Panalpina is expected to generate 2.54 times less return on investment than Lollands Bank. But when comparing it to its historical volatility, DSV Panalpina AS is 1.64 times less risky than Lollands Bank. It trades about 0.1 of its potential returns per unit of risk. Lollands Bank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 55,000 in Lollands Bank on September 18, 2024 and sell it today you would earn a total of 3,000 from holding Lollands Bank or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSV Panalpina AS vs. Lollands Bank
Performance |
| Timeline |
| DSV Panalpina AS |
| Lollands Bank |
DSV Panalpina and Lollands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSV Panalpina and Lollands Bank
The main advantage of trading using opposite DSV Panalpina and Lollands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSV Panalpina position performs unexpectedly, Lollands 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 Lollands Bank will offset losses from the drop in Lollands Bank's long position.| DSV Panalpina vs. Genmab AS | DSV Panalpina vs. Danske Bank AS | DSV Panalpina vs. Ambu AS | DSV Panalpina vs. Bavarian Nordic |
| Lollands Bank vs. FLSmidth Co | Lollands Bank vs. Danske Bank AS | Lollands Bank vs. ISS AS | Lollands Bank vs. DSV Panalpina 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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