Correlation Between Hvidbjerg Bank and Nordfyns Bank
Can any of the company-specific risk be diversified away by investing in both Hvidbjerg Bank and Nordfyns 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 Hvidbjerg Bank and Nordfyns Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hvidbjerg Bank and Nordfyns Bank AS, you can compare the effects of market volatilities on Hvidbjerg Bank and Nordfyns 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 Hvidbjerg Bank with a short position of Nordfyns Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hvidbjerg Bank and Nordfyns Bank.
Diversification Opportunities for Hvidbjerg Bank and Nordfyns Bank
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hvidbjerg and Nordfyns is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hvidbjerg Bank and Nordfyns Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordfyns Bank 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 Nordfyns Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordfyns Bank AS has no effect on the direction of Hvidbjerg Bank i.e., Hvidbjerg Bank and Nordfyns Bank go up and down completely randomly.
Pair Corralation between Hvidbjerg Bank and Nordfyns Bank
Assuming the 90 days trading horizon Hvidbjerg Bank is expected to generate 3.25 times less return on investment than Nordfyns Bank. In addition to that, Hvidbjerg Bank is 1.45 times more volatile than Nordfyns Bank AS. It trades about 0.03 of its total potential returns per unit of risk. Nordfyns Bank AS is currently generating about 0.16 per unit of volatility. If you would invest 34,400 in Nordfyns Bank AS on November 18, 2024 and sell it today you would earn a total of 1,000.00 from holding Nordfyns Bank AS or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hvidbjerg Bank vs. Nordfyns Bank AS
Performance |
| Timeline |
| Hvidbjerg Bank |
| Nordfyns Bank AS |
Hvidbjerg Bank and Nordfyns Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hvidbjerg Bank and Nordfyns Bank
The main advantage of trading using opposite Hvidbjerg Bank and Nordfyns Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hvidbjerg Bank position performs unexpectedly, Nordfyns 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 Nordfyns Bank will offset losses from the drop in Nordfyns Bank's long position.| Hvidbjerg Bank vs. Skjern Bank AS | Hvidbjerg Bank vs. Lollands Bank | Hvidbjerg Bank vs. Djurslands Bank | Hvidbjerg Bank vs. Nordfyns Bank AS |
| Nordfyns Bank vs. Skjern Bank AS | Nordfyns Bank vs. Lollands Bank | Nordfyns Bank vs. Djurslands Bank | Nordfyns Bank vs. Moens Bank 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 CEOs Directory module to screen CEOs from public companies around the world.
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