Correlation Between ISS AS and Moens Bank
Can any of the company-specific risk be diversified away by investing in both ISS AS and Moens 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 Moens 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 Moens Bank AS, you can compare the effects of market volatilities on ISS AS and Moens 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 Moens Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISS AS and Moens Bank.
Diversification Opportunities for ISS AS and Moens Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ISS and Moens is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ISS AS and Moens Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moens Bank AS 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 Moens Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moens Bank AS has no effect on the direction of ISS AS i.e., ISS AS and Moens Bank go up and down completely randomly.
Pair Corralation between ISS AS and Moens Bank
Assuming the 90 days trading horizon ISS AS is expected to under-perform the Moens Bank. In addition to that, ISS AS is 1.26 times more volatile than Moens Bank AS. It trades about -0.01 of its total potential returns per unit of risk. Moens Bank AS is currently generating about 0.02 per unit of volatility. If you would invest 20,208 in Moens Bank AS on September 20, 2024 and sell it today you would earn a total of 2,392 from holding Moens Bank AS or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ISS AS vs. Moens Bank AS
Performance |
| Timeline |
| ISS AS |
| Moens Bank AS |
ISS AS and Moens Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISS AS and Moens Bank
The main advantage of trading using opposite ISS AS and Moens Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISS AS position performs unexpectedly, Moens 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 Moens Bank will offset losses from the drop in Moens Bank's long position.The idea behind ISS AS and Moens Bank AS 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.| Moens Bank vs. FLSmidth Co | Moens Bank vs. Danske Bank AS | Moens Bank vs. ISS AS | Moens 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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