Correlation Between Newcap Holding and Danske Invest
Can any of the company-specific risk be diversified away by investing in both Newcap Holding 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 Newcap Holding and Danske Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcap Holding AS and Danske Invest , you can compare the effects of market volatilities on Newcap Holding 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 Newcap Holding with a short position of Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcap Holding and Danske Invest.
Diversification Opportunities for Newcap Holding and Danske Invest
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newcap and Danske is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Newcap Holding AS and Danske Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest and Newcap Holding 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 Newcap Holding 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 Newcap Holding i.e., Newcap Holding and Danske Invest go up and down completely randomly.
Pair Corralation between Newcap Holding and Danske Invest
Assuming the 90 days trading horizon Newcap Holding AS is expected to generate 252.28 times more return on investment than Danske Invest. However, Newcap Holding is 252.28 times more volatile than Danske Invest . It trades about 0.04 of its potential returns per unit of risk. Danske Invest is currently generating about 0.39 per unit of risk. If you would invest 18.00 in Newcap Holding AS on September 3, 2024 and sell it today you would lose (8.20) from holding Newcap Holding AS or give up 45.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newcap Holding AS vs. Danske Invest
Performance |
| Timeline |
| Newcap Holding AS |
| Danske Invest |
Newcap Holding and Danske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcap Holding and Danske Invest
The main advantage of trading using opposite Newcap Holding and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcap Holding 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.| Newcap Holding vs. SKAKO AS | Newcap Holding vs. Lollands Bank | Newcap Holding vs. Scandinavian Brake Systems | Newcap Holding vs. Rovsing AS |
| Danske Invest vs. Kreditbanken AS | Danske Invest vs. PARKEN Sport Entertainment | Danske Invest vs. Prime Office AS | Danske Invest vs. Djurslands Bank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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