Correlation Between Lollands Bank and Dantax
Can any of the company-specific risk be diversified away by investing in both Lollands Bank and Dantax 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 Dantax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lollands Bank and Dantax, you can compare the effects of market volatilities on Lollands Bank and Dantax 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 Dantax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lollands Bank and Dantax.
Diversification Opportunities for Lollands Bank and Dantax
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lollands and Dantax is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lollands Bank and Dantax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dantax 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 Dantax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dantax has no effect on the direction of Lollands Bank i.e., Lollands Bank and Dantax go up and down completely randomly.
Pair Corralation between Lollands Bank and Dantax
Assuming the 90 days trading horizon Lollands Bank is expected to generate 4.97 times less return on investment than Dantax. But when comparing it to its historical volatility, Lollands Bank is 1.72 times less risky than Dantax. It trades about 0.02 of its potential returns per unit of risk. Dantax is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 32,000 in Dantax on November 5, 2024 and sell it today you would earn a total of 18,000 from holding Dantax or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lollands Bank vs. Dantax
Performance |
| Timeline |
| Lollands Bank |
| Dantax |
Lollands Bank and Dantax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lollands Bank and Dantax
The main advantage of trading using opposite Lollands Bank and Dantax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lollands Bank position performs unexpectedly, Dantax 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 Dantax will offset losses from the drop in Dantax's long position.| Lollands Bank vs. Skjern Bank AS | Lollands Bank vs. Kreditbanken AS | Lollands Bank vs. Djurslands Bank | Lollands Bank vs. Groenlandsbanken AS |
| Dantax vs. Groenlandsbanken AS | Dantax vs. Investeringsselskabet Luxor AS | Dantax vs. RIAS AS | Dantax vs. Lollands 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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