Correlation Between Investin Optimal and Vestjysk Bank
Can any of the company-specific risk be diversified away by investing in both Investin Optimal 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 Investin Optimal and Vestjysk Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investin Optimal Stabil and Vestjysk Bank AS, you can compare the effects of market volatilities on Investin Optimal 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 Investin Optimal with a short position of Vestjysk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investin Optimal and Vestjysk Bank.
Diversification Opportunities for Investin Optimal and Vestjysk Bank
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investin and Vestjysk is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Investin Optimal Stabil 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 Investin Optimal 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 Investin Optimal Stabil 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 Investin Optimal i.e., Investin Optimal and Vestjysk Bank go up and down completely randomly.
Pair Corralation between Investin Optimal and Vestjysk Bank
Assuming the 90 days trading horizon Investin Optimal is expected to generate 2.07 times less return on investment than Vestjysk Bank. But when comparing it to its historical volatility, Investin Optimal Stabil is 5.12 times less risky than Vestjysk Bank. It trades about 0.14 of its potential returns per unit of risk. Vestjysk Bank AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 311.00 in Vestjysk Bank AS on September 24, 2024 and sell it today you would earn a total of 112.00 from holding Vestjysk Bank AS or generate 36.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investin Optimal Stabil vs. Vestjysk Bank AS
Performance |
| Timeline |
| Investin Optimal Stabil |
| Vestjysk Bank AS |
Investin Optimal and Vestjysk Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investin Optimal and Vestjysk Bank
The main advantage of trading using opposite Investin Optimal and Vestjysk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investin Optimal 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.| Investin Optimal vs. Fynske Bank AS | Investin Optimal vs. NTG Nordic Transport | Investin Optimal vs. PARKEN Sport Entertainment | Investin Optimal vs. Jyske Bank AS |
| Vestjysk Bank vs. Novo Nordisk AS | Vestjysk Bank vs. Scandinavian Tobacco Group | Vestjysk Bank vs. ISS AS | Vestjysk Bank vs. FLSmidth Co |
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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