Correlation Between DSV Panalpina and Vestjysk Bank
Can any of the company-specific risk be diversified away by investing in both DSV Panalpina and Vestjysk 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 Vestjysk 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 Vestjysk Bank AS, you can compare the effects of market volatilities on DSV Panalpina and Vestjysk 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 Vestjysk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and Vestjysk Bank.
Diversification Opportunities for DSV Panalpina and Vestjysk Bank
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DSV and Vestjysk is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Vestjysk Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestjysk Bank AS 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 Vestjysk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestjysk Bank AS has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Vestjysk Bank go up and down completely randomly.
Pair Corralation between DSV Panalpina and Vestjysk Bank
Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 2.11 times more return on investment than Vestjysk Bank. However, DSV Panalpina is 2.11 times more volatile than Vestjysk Bank AS. It trades about 0.2 of its potential returns per unit of risk. Vestjysk Bank AS is currently generating about -0.02 per unit of risk. If you would invest 115,650 in DSV Panalpina AS on September 4, 2024 and sell it today you would earn a total of 38,000 from holding DSV Panalpina AS or generate 32.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSV Panalpina AS vs. Vestjysk Bank AS
Performance |
| Timeline |
| DSV Panalpina AS |
| Vestjysk Bank AS |
DSV Panalpina and Vestjysk Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSV Panalpina and Vestjysk Bank
The main advantage of trading using opposite DSV Panalpina and Vestjysk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSV Panalpina position performs unexpectedly, Vestjysk 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 Vestjysk Bank will offset losses from the drop in Vestjysk Bank's long position.| DSV Panalpina vs. Genmab AS | DSV Panalpina vs. Danske Bank AS | DSV Panalpina vs. Ambu AS | DSV Panalpina vs. FLSmidth Co |
| Vestjysk Bank vs. FLSmidth Co | Vestjysk Bank vs. Danske Bank AS | Vestjysk Bank vs. ISS AS | Vestjysk 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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