Correlation Between Maj Invest and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Maj Invest and Danske Bank 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 Maj Invest and Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maj Invest and Danske Bank AS, you can compare the effects of market volatilities on Maj Invest and Danske Bank 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 Maj Invest with a short position of Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maj Invest and Danske Bank.
Diversification Opportunities for Maj Invest and Danske Bank
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maj and Danske is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Maj Invest and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS and Maj Invest 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 Maj Invest are associated (or correlated) with Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Maj Invest i.e., Maj Invest and Danske Bank go up and down completely randomly.
Pair Corralation between Maj Invest and Danske Bank
Assuming the 90 days trading horizon Maj Invest is expected to generate 0.17 times more return on investment than Danske Bank. However, Maj Invest is 5.94 times less risky than Danske Bank. It trades about 0.15 of its potential returns per unit of risk. Danske Bank AS is currently generating about -0.06 per unit of risk. If you would invest 9,879 in Maj Invest on August 28, 2024 and sell it today you would earn a total of 186.00 from holding Maj Invest or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maj Invest vs. Danske Bank AS
Performance |
| Timeline |
| Maj Invest |
| Danske Bank AS |
Maj Invest and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maj Invest and Danske Bank
The main advantage of trading using opposite Maj Invest and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maj Invest position performs unexpectedly, Danske Bank 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 Bank will offset losses from the drop in Danske Bank's long position.| Maj Invest vs. Jyske Invest Nye | Maj Invest vs. Jyske Invest Korte | Maj Invest vs. Jyske Invest Nye | Maj Invest vs. Jyske Invest Virksomhedsobligationer |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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