Correlation Between Kreditbanken and IA Invest
Can any of the company-specific risk be diversified away by investing in both Kreditbanken and IA Invest 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 IA Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kreditbanken AS and IA Invest Peruma, you can compare the effects of market volatilities on Kreditbanken and IA Invest 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 IA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kreditbanken and IA Invest.
Diversification Opportunities for Kreditbanken and IA Invest
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kreditbanken and IAIPGA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kreditbanken AS and IA Invest Peruma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Invest Peruma 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 IA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Invest Peruma has no effect on the direction of Kreditbanken i.e., Kreditbanken and IA Invest go up and down completely randomly.
Pair Corralation between Kreditbanken and IA Invest
Assuming the 90 days trading horizon Kreditbanken AS is expected to generate 1.05 times more return on investment than IA Invest. However, Kreditbanken is 1.05 times more volatile than IA Invest Peruma. It trades about 0.03 of its potential returns per unit of risk. IA Invest Peruma is currently generating about 0.0 per unit of risk. If you would invest 498,000 in Kreditbanken AS on September 19, 2024 and sell it today you would earn a total of 17,000 from holding Kreditbanken AS or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.25% |
| Values | Daily Returns |
Kreditbanken AS vs. IA Invest Peruma
Performance |
| Timeline |
| Kreditbanken AS |
| IA Invest Peruma |
Kreditbanken and IA Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kreditbanken and IA Invest
The main advantage of trading using opposite Kreditbanken and IA Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kreditbanken position performs unexpectedly, IA Invest 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 IA Invest will offset losses from the drop in IA Invest's long position.| Kreditbanken vs. Lollands Bank | Kreditbanken vs. Groenlandsbanken AS | Kreditbanken vs. Skjern Bank AS | Kreditbanken vs. Djurslands Bank |
| IA Invest vs. Kreditbanken AS | IA Invest vs. Laan Spar Bank | IA Invest vs. PARKEN Sport Entertainment | IA Invest vs. North Media 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |