Correlation Between ISS AS and Hvidbjerg Bank
Can any of the company-specific risk be diversified away by investing in both ISS AS and Hvidbjerg 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 ISS AS and Hvidbjerg Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISS AS and Hvidbjerg Bank, you can compare the effects of market volatilities on ISS AS and Hvidbjerg 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 ISS AS with a short position of Hvidbjerg Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISS AS and Hvidbjerg Bank.
Diversification Opportunities for ISS AS and Hvidbjerg Bank
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ISS and Hvidbjerg is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ISS AS and Hvidbjerg Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hvidbjerg Bank and ISS AS 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 ISS AS are associated (or correlated) with Hvidbjerg Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hvidbjerg Bank has no effect on the direction of ISS AS i.e., ISS AS and Hvidbjerg Bank go up and down completely randomly.
Pair Corralation between ISS AS and Hvidbjerg Bank
Assuming the 90 days trading horizon ISS AS is expected to generate 1.83 times less return on investment than Hvidbjerg Bank. In addition to that, ISS AS is 1.16 times more volatile than Hvidbjerg Bank. It trades about 0.02 of its total potential returns per unit of risk. Hvidbjerg Bank is currently generating about 0.04 per unit of volatility. If you would invest 10,500 in Hvidbjerg Bank on September 3, 2024 and sell it today you would earn a total of 1,300 from holding Hvidbjerg Bank or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ISS AS vs. Hvidbjerg Bank
Performance |
| Timeline |
| ISS AS |
| Hvidbjerg Bank |
ISS AS and Hvidbjerg Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISS AS and Hvidbjerg Bank
The main advantage of trading using opposite ISS AS and Hvidbjerg Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISS AS position performs unexpectedly, Hvidbjerg 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 Hvidbjerg Bank will offset losses from the drop in Hvidbjerg Bank's long position.The idea behind ISS AS and Hvidbjerg Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hvidbjerg Bank vs. FLSmidth Co | Hvidbjerg Bank vs. Danske Bank AS | Hvidbjerg Bank vs. ISS AS | Hvidbjerg 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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