Correlation Between InBankshares Corp and Danske Bank
Can any of the company-specific risk be diversified away by investing in both InBankshares Corp and Danske 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 InBankshares Corp and Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InBankshares Corp and Danske Bank AS, you can compare the effects of market volatilities on InBankshares Corp and Danske 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 InBankshares Corp with a short position of Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of InBankshares Corp and Danske Bank.
Diversification Opportunities for InBankshares Corp and Danske Bank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InBankshares and Danske is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding InBankshares Corp and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS and InBankshares Corp 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 InBankshares Corp are associated (or correlated) with Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of InBankshares Corp i.e., InBankshares Corp and Danske Bank go up and down completely randomly.
Pair Corralation between InBankshares Corp and Danske Bank
Given the investment horizon of 90 days InBankshares Corp is expected to generate 0.35 times more return on investment than Danske Bank. However, InBankshares Corp is 2.83 times less risky than Danske Bank. It trades about 0.26 of its potential returns per unit of risk. Danske Bank AS is currently generating about -0.17 per unit of risk. If you would invest 775.00 in InBankshares Corp on September 2, 2024 and sell it today you would earn a total of 25.00 from holding InBankshares Corp or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InBankshares Corp vs. Danske Bank AS
Performance |
| Timeline |
| InBankshares Corp |
| Danske Bank AS |
InBankshares Corp and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InBankshares Corp and Danske Bank
The main advantage of trading using opposite InBankshares Corp and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InBankshares Corp position performs unexpectedly, Danske 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 Danske Bank will offset losses from the drop in Danske Bank's long position.| InBankshares Corp vs. Western Alliance Bancorporation | InBankshares Corp vs. Zions Bancorporation | InBankshares Corp vs. KeyCorp | InBankshares Corp vs. First Horizon National |
| Danske Bank vs. Israel Discount Bank | Danske Bank vs. Baraboo Bancorporation | Danske Bank vs. Schweizerische Nationalbank | Danske Bank vs. Jyske 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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