Correlation Between Moens Bank and IA Invest
Can any of the company-specific risk be diversified away by investing in both Moens Bank and IA 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 Moens Bank and IA Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moens Bank AS and IA Invest Peruma, you can compare the effects of market volatilities on Moens Bank and IA 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 Moens Bank with a short position of IA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moens Bank and IA Invest.
Diversification Opportunities for Moens Bank and IA Invest
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Moens and IAIPGA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Moens Bank AS and IA Invest Peruma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Invest Peruma and Moens 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 Moens Bank AS are associated (or correlated) with IA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Invest Peruma has no effect on the direction of Moens Bank i.e., Moens Bank and IA Invest go up and down completely randomly.
Pair Corralation between Moens Bank and IA Invest
Assuming the 90 days trading horizon Moens Bank AS is expected to generate 1.24 times more return on investment than IA Invest. However, Moens Bank is 1.24 times more volatile than IA Invest Peruma. It trades about 0.05 of its potential returns per unit of risk. IA Invest Peruma is currently generating about -0.01 per unit of risk. If you would invest 21,800 in Moens Bank AS on September 24, 2024 and sell it today you would earn a total of 400.00 from holding Moens Bank AS or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
Moens Bank AS vs. IA Invest Peruma
Performance |
| Timeline |
| Moens Bank AS |
| IA Invest Peruma |
Moens Bank and IA Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moens Bank and IA Invest
The main advantage of trading using opposite Moens Bank and IA Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moens Bank position performs unexpectedly, IA 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 IA Invest will offset losses from the drop in IA Invest's long position.| Moens Bank vs. Novo Nordisk AS | Moens Bank vs. Scandinavian Tobacco Group | Moens Bank vs. ISS AS | Moens Bank vs. FLSmidth Co |
| IA Invest vs. Embla Medical hf | IA Invest vs. Jyske Bank AS | IA Invest vs. Moens Bank AS | IA Invest vs. PARKEN Sport Entertainment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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