Correlation Between Copenhagen Airports and H Lundbeck
Can any of the company-specific risk be diversified away by investing in both Copenhagen Airports and H Lundbeck 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 Copenhagen Airports and H Lundbeck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copenhagen Airports AS and H Lundbeck AS, you can compare the effects of market volatilities on Copenhagen Airports and H Lundbeck 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 Copenhagen Airports with a short position of H Lundbeck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copenhagen Airports and H Lundbeck.
Diversification Opportunities for Copenhagen Airports and H Lundbeck
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copenhagen and HLUN-A is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Copenhagen Airports AS and H Lundbeck AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H Lundbeck AS and Copenhagen Airports 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 Copenhagen Airports AS are associated (or correlated) with H Lundbeck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H Lundbeck AS has no effect on the direction of Copenhagen Airports i.e., Copenhagen Airports and H Lundbeck go up and down completely randomly.
Pair Corralation between Copenhagen Airports and H Lundbeck
Assuming the 90 days trading horizon Copenhagen Airports AS is expected to generate 9.85 times more return on investment than H Lundbeck. However, Copenhagen Airports is 9.85 times more volatile than H Lundbeck AS. It trades about 0.19 of its potential returns per unit of risk. H Lundbeck AS is currently generating about -0.23 per unit of risk. If you would invest 398,000 in Copenhagen Airports AS on September 18, 2024 and sell it today you would earn a total of 204,000 from holding Copenhagen Airports AS or generate 51.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copenhagen Airports AS vs. H Lundbeck AS
Performance |
| Timeline |
| Copenhagen Airports |
| H Lundbeck AS |
Copenhagen Airports and H Lundbeck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copenhagen Airports and H Lundbeck
The main advantage of trading using opposite Copenhagen Airports and H Lundbeck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copenhagen Airports position performs unexpectedly, H Lundbeck 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 H Lundbeck will offset losses from the drop in H Lundbeck's long position.| Copenhagen Airports vs. Genmab AS | Copenhagen Airports vs. Danske Bank AS | Copenhagen Airports vs. Ambu AS | Copenhagen Airports vs. Bavarian Nordic |
| H Lundbeck vs. GN Store Nord | H Lundbeck vs. FLSmidth Co | H Lundbeck vs. ALK Abell AS | H Lundbeck vs. Ambu 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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