Correlation Between Moens Bank and Skjern Bank
Can any of the company-specific risk be diversified away by investing in both Moens Bank and Skjern 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 Moens Bank and Skjern Bank 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 Skjern Bank AS, you can compare the effects of market volatilities on Moens Bank and Skjern 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 Moens Bank with a short position of Skjern Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moens Bank and Skjern Bank.
Diversification Opportunities for Moens Bank and Skjern Bank
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moens and Skjern is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Moens Bank AS and Skjern Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skjern Bank AS 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 Skjern Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skjern Bank AS has no effect on the direction of Moens Bank i.e., Moens Bank and Skjern Bank go up and down completely randomly.
Pair Corralation between Moens Bank and Skjern Bank
Assuming the 90 days trading horizon Moens Bank AS is expected to generate 0.61 times more return on investment than Skjern Bank. However, Moens Bank AS is 1.63 times less risky than Skjern Bank. It trades about 0.1 of its potential returns per unit of risk. Skjern Bank AS is currently generating about -0.25 per unit of risk. If you would invest 23,200 in Moens Bank AS on November 4, 2024 and sell it today you would earn a total of 600.00 from holding Moens Bank AS or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moens Bank AS vs. Skjern Bank AS
Performance |
| Timeline |
| Moens Bank AS |
| Skjern Bank AS |
Moens Bank and Skjern Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moens Bank and Skjern Bank
The main advantage of trading using opposite Moens Bank and Skjern Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moens Bank position performs unexpectedly, Skjern 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 Skjern Bank will offset losses from the drop in Skjern Bank's long position.| Moens Bank vs. Skjern Bank AS | Moens Bank vs. Lollands Bank | Moens Bank vs. Nordfyns Bank AS | Moens Bank vs. Groenlandsbanken AS |
| Skjern Bank vs. Djurslands Bank | Skjern Bank vs. Kreditbanken AS | Skjern Bank vs. Lollands Bank | Skjern Bank vs. Carnegie Wealth Management |
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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