Correlation Between Lollands Bank and Nnit AS
Can any of the company-specific risk be diversified away by investing in both Lollands Bank and Nnit 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 Lollands Bank and Nnit AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lollands Bank and Nnit AS, you can compare the effects of market volatilities on Lollands Bank and Nnit 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 Lollands Bank with a short position of Nnit AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lollands Bank and Nnit AS.
Diversification Opportunities for Lollands Bank and Nnit AS
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lollands and Nnit is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lollands Bank and Nnit AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nnit AS 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 Nnit AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nnit AS has no effect on the direction of Lollands Bank i.e., Lollands Bank and Nnit AS go up and down completely randomly.
Pair Corralation between Lollands Bank and Nnit AS
Assuming the 90 days trading horizon Lollands Bank is expected to generate 0.7 times more return on investment than Nnit AS. However, Lollands Bank is 1.43 times less risky than Nnit AS. It trades about 0.23 of its potential returns per unit of risk. Nnit AS is currently generating about -0.21 per unit of risk. If you would invest 61,500 in Lollands Bank on December 1, 2024 and sell it today you would earn a total of 6,500 from holding Lollands Bank or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lollands Bank vs. Nnit AS
Performance |
| Timeline |
| Lollands Bank |
| Nnit AS |
Lollands Bank and Nnit AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lollands Bank and Nnit AS
The main advantage of trading using opposite Lollands Bank and Nnit AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lollands Bank position performs unexpectedly, Nnit 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 Nnit AS will offset losses from the drop in Nnit AS's long position.| Lollands Bank vs. Skjern Bank AS | Lollands Bank vs. Kreditbanken AS | Lollands Bank vs. Djurslands Bank | Lollands Bank vs. Groenlandsbanken AS |
| Nnit AS vs. Kreditbanken AS | Nnit AS vs. Cessatech AS | Nnit AS vs. BankInvest Value Globale | Nnit AS vs. Nordinvestments 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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