Correlation Between Maj Invest and Vestjysk Bank
Can any of the company-specific risk be diversified away by investing in both Maj Invest and Vestjysk 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 Vestjysk Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maj Invest Pension and Vestjysk Bank AS, you can compare the effects of market volatilities on Maj Invest and Vestjysk 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 Vestjysk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maj Invest and Vestjysk Bank.
Diversification Opportunities for Maj Invest and Vestjysk Bank
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maj and Vestjysk is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Maj Invest Pension and Vestjysk Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestjysk 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 Pension are associated (or correlated) with Vestjysk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestjysk Bank AS has no effect on the direction of Maj Invest i.e., Maj Invest and Vestjysk Bank go up and down completely randomly.
Pair Corralation between Maj Invest and Vestjysk Bank
Assuming the 90 days trading horizon Maj Invest is expected to generate 2.5 times less return on investment than Vestjysk Bank. But when comparing it to its historical volatility, Maj Invest Pension is 2.55 times less risky than Vestjysk Bank. It trades about 0.06 of its potential returns per unit of risk. Vestjysk Bank AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Vestjysk Bank AS on August 30, 2024 and sell it today you would earn a total of 113.00 from holding Vestjysk Bank AS or generate 38.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maj Invest Pension vs. Vestjysk Bank AS
Performance |
| Timeline |
| Maj Invest Pension |
| Vestjysk Bank AS |
Maj Invest and Vestjysk Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maj Invest and Vestjysk Bank
The main advantage of trading using opposite Maj Invest and Vestjysk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maj Invest position performs unexpectedly, Vestjysk 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 Vestjysk Bank will offset losses from the drop in Vestjysk Bank's long position.| Maj Invest vs. Vestjysk Bank AS | Maj Invest vs. Scandinavian Tobacco Group | Maj Invest vs. Hvidbjerg Bank | Maj Invest vs. Djurslands Bank |
| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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