Correlation Between Lollands Bank and Danske Andelskassers
Can any of the company-specific risk be diversified away by investing in both Lollands Bank and Danske Andelskassers 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 Lollands Bank and Danske Andelskassers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lollands Bank and Danske Andelskassers Bank, you can compare the effects of market volatilities on Lollands Bank and Danske Andelskassers 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 Lollands Bank with a short position of Danske Andelskassers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lollands Bank and Danske Andelskassers.
Diversification Opportunities for Lollands Bank and Danske Andelskassers
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lollands and Danske is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lollands Bank and Danske Andelskassers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Andelskassers Bank and Lollands Bank 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 Lollands Bank are associated (or correlated) with Danske Andelskassers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Andelskassers Bank has no effect on the direction of Lollands Bank i.e., Lollands Bank and Danske Andelskassers go up and down completely randomly.
Pair Corralation between Lollands Bank and Danske Andelskassers
Assuming the 90 days trading horizon Lollands Bank is expected to generate 2.05 times more return on investment than Danske Andelskassers. However, Lollands Bank is 2.05 times more volatile than Danske Andelskassers Bank. It trades about -0.05 of its potential returns per unit of risk. Danske Andelskassers Bank is currently generating about -0.16 per unit of risk. If you would invest 55,500 in Lollands Bank on September 2, 2024 and sell it today you would lose (1,000.00) from holding Lollands Bank or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lollands Bank vs. Danske Andelskassers Bank
Performance |
| Timeline |
| Lollands Bank |
| Danske Andelskassers Bank |
Lollands Bank and Danske Andelskassers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lollands Bank and Danske Andelskassers
The main advantage of trading using opposite Lollands Bank and Danske Andelskassers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lollands Bank position performs unexpectedly, Danske Andelskassers 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 Danske Andelskassers will offset losses from the drop in Danske Andelskassers' long position.| Lollands Bank vs. Sydbank AS | Lollands Bank vs. Jyske Bank AS | Lollands Bank vs. Alm Brand | Lollands Bank vs. Nordea Bank Abp |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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