Correlation Between Kreditbanken and Orsted AS
Can any of the company-specific risk be diversified away by investing in both Kreditbanken and Orsted AS 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 Orsted AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kreditbanken AS and Orsted AS, you can compare the effects of market volatilities on Kreditbanken and Orsted AS 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 Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kreditbanken and Orsted AS.
Diversification Opportunities for Kreditbanken and Orsted AS
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kreditbanken and Orsted is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kreditbanken AS and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS 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 Orsted AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted AS has no effect on the direction of Kreditbanken i.e., Kreditbanken and Orsted AS go up and down completely randomly.
Pair Corralation between Kreditbanken and Orsted AS
Assuming the 90 days trading horizon Kreditbanken AS is expected to generate 0.47 times more return on investment than Orsted AS. However, Kreditbanken AS is 2.14 times less risky than Orsted AS. It trades about 0.16 of its potential returns per unit of risk. Orsted AS is currently generating about -0.11 per unit of risk. If you would invest 505,000 in Kreditbanken AS on October 20, 2024 and sell it today you would earn a total of 20,000 from holding Kreditbanken AS or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kreditbanken AS vs. Orsted AS
Performance |
| Timeline |
| Kreditbanken AS |
| Orsted AS |
Kreditbanken and Orsted AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kreditbanken and Orsted AS
The main advantage of trading using opposite Kreditbanken and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kreditbanken position performs unexpectedly, Orsted AS 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 Orsted AS will offset losses from the drop in Orsted AS's long position.| Kreditbanken vs. Lollands Bank | Kreditbanken vs. Groenlandsbanken AS | Kreditbanken vs. Skjern Bank AS | Kreditbanken vs. Djurslands Bank |
| Orsted AS vs. Alefarm Brewing AS | Orsted AS vs. Kreditbanken AS | Orsted AS vs. Sydbank AS | Orsted AS vs. Danske Andelskassers Bank |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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