Correlation Between Hvidbjerg Bank and Kreditbanken
Can any of the company-specific risk be diversified away by investing in both Hvidbjerg Bank and Kreditbanken 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 Hvidbjerg Bank and Kreditbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hvidbjerg Bank and Kreditbanken AS, you can compare the effects of market volatilities on Hvidbjerg Bank and Kreditbanken 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 Hvidbjerg Bank with a short position of Kreditbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hvidbjerg Bank and Kreditbanken.
Diversification Opportunities for Hvidbjerg Bank and Kreditbanken
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hvidbjerg and Kreditbanken is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hvidbjerg Bank and Kreditbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kreditbanken AS and Hvidbjerg 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 Hvidbjerg Bank are associated (or correlated) with Kreditbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kreditbanken AS has no effect on the direction of Hvidbjerg Bank i.e., Hvidbjerg Bank and Kreditbanken go up and down completely randomly.
Pair Corralation between Hvidbjerg Bank and Kreditbanken
Assuming the 90 days trading horizon Hvidbjerg Bank is expected to generate 0.98 times more return on investment than Kreditbanken. However, Hvidbjerg Bank is 1.02 times less risky than Kreditbanken. It trades about 0.13 of its potential returns per unit of risk. Kreditbanken AS is currently generating about -0.04 per unit of risk. If you would invest 11,400 in Hvidbjerg Bank on August 29, 2024 and sell it today you would earn a total of 400.00 from holding Hvidbjerg Bank or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hvidbjerg Bank vs. Kreditbanken AS
Performance |
| Timeline |
| Hvidbjerg Bank |
| Kreditbanken AS |
Hvidbjerg Bank and Kreditbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hvidbjerg Bank and Kreditbanken
The main advantage of trading using opposite Hvidbjerg Bank and Kreditbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hvidbjerg Bank position performs unexpectedly, Kreditbanken 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 Kreditbanken will offset losses from the drop in Kreditbanken's long position.| Hvidbjerg Bank vs. Dataproces Group AS | Hvidbjerg Bank vs. cBrain AS | Hvidbjerg Bank vs. ALK Abell AS | Hvidbjerg Bank vs. ChemoMetec AS |
| Kreditbanken vs. Dataproces Group AS | Kreditbanken vs. cBrain AS | Kreditbanken vs. ALK Abell AS | Kreditbanken vs. ChemoMetec 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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