Correlation Between Kreditbanken and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both Kreditbanken and BankInvest Optima 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 Kreditbanken and BankInvest Optima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kreditbanken AS and BankInvest Optima 30, you can compare the effects of market volatilities on Kreditbanken and BankInvest Optima 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 Kreditbanken with a short position of BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kreditbanken and BankInvest Optima.
Diversification Opportunities for Kreditbanken and BankInvest Optima
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kreditbanken and BankInvest is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kreditbanken AS and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima and Kreditbanken 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 Kreditbanken AS are associated (or correlated) with BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Kreditbanken i.e., Kreditbanken and BankInvest Optima go up and down completely randomly.
Pair Corralation between Kreditbanken and BankInvest Optima
Assuming the 90 days trading horizon Kreditbanken is expected to generate 3.78 times less return on investment than BankInvest Optima. In addition to that, Kreditbanken is 4.1 times more volatile than BankInvest Optima 30. It trades about 0.01 of its total potential returns per unit of risk. BankInvest Optima 30 is currently generating about 0.09 per unit of volatility. If you would invest 12,380 in BankInvest Optima 30 on November 8, 2024 and sell it today you would earn a total of 65.00 from holding BankInvest Optima 30 or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kreditbanken AS vs. BankInvest Optima 30
Performance |
| Timeline |
| Kreditbanken AS |
| BankInvest Optima |
Kreditbanken and BankInvest Optima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kreditbanken and BankInvest Optima
The main advantage of trading using opposite Kreditbanken and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kreditbanken position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima's long position.| Kreditbanken vs. Lollands Bank | Kreditbanken vs. Groenlandsbanken AS | Kreditbanken vs. Skjern Bank AS | Kreditbanken vs. Djurslands Bank |
| BankInvest Optima vs. Novo Nordisk AS | BankInvest Optima vs. Nordea Bank Abp | BankInvest Optima vs. DSV Panalpina AS | BankInvest Optima vs. AP Mller |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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