Correlation Between Matas AS and Danske Invest
Can any of the company-specific risk be diversified away by investing in both Matas AS and Danske Invest 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 Matas AS and Danske Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matas AS and Danske Invest , you can compare the effects of market volatilities on Matas AS and Danske Invest 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 Matas AS with a short position of Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matas AS and Danske Invest.
Diversification Opportunities for Matas AS and Danske Invest
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Matas and Danske is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and Danske Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest and Matas AS 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 Matas AS are associated (or correlated) with Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest has no effect on the direction of Matas AS i.e., Matas AS and Danske Invest go up and down completely randomly.
Pair Corralation between Matas AS and Danske Invest
Assuming the 90 days trading horizon Matas AS is expected to generate 37.81 times more return on investment than Danske Invest. However, Matas AS is 37.81 times more volatile than Danske Invest . It trades about 0.05 of its potential returns per unit of risk. Danske Invest is currently generating about 0.75 per unit of risk. If you would invest 12,280 in Matas AS on September 1, 2024 and sell it today you would earn a total of 220.00 from holding Matas AS or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Matas AS vs. Danske Invest
Performance |
| Timeline |
| Matas AS |
| Danske Invest |
Matas AS and Danske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matas AS and Danske Invest
The main advantage of trading using opposite Matas AS and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matas AS position performs unexpectedly, Danske Invest 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 Invest will offset losses from the drop in Danske Invest's long position.The idea behind Matas AS and Danske Invest pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Danske Invest vs. Danske Andelskassers Bank | Danske Invest vs. Laan Spar Bank | Danske Invest vs. Prime Office AS | Danske Invest vs. Dataproces Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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