Correlation Between Nilfisk Holding and Dampskibsselskabet
Can any of the company-specific risk be diversified away by investing in both Nilfisk Holding and Dampskibsselskabet 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 Nilfisk Holding and Dampskibsselskabet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nilfisk Holding AS and Dampskibsselskabet Norden AS, you can compare the effects of market volatilities on Nilfisk Holding and Dampskibsselskabet 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 Nilfisk Holding with a short position of Dampskibsselskabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nilfisk Holding and Dampskibsselskabet.
Diversification Opportunities for Nilfisk Holding and Dampskibsselskabet
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nilfisk and Dampskibsselskabet is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nilfisk Holding AS and Dampskibsselskabet Norden AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dampskibsselskabet and Nilfisk 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 Nilfisk Holding AS are associated (or correlated) with Dampskibsselskabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dampskibsselskabet has no effect on the direction of Nilfisk Holding i.e., Nilfisk Holding and Dampskibsselskabet go up and down completely randomly.
Pair Corralation between Nilfisk Holding and Dampskibsselskabet
Assuming the 90 days trading horizon Nilfisk Holding AS is expected to generate 1.04 times more return on investment than Dampskibsselskabet. However, Nilfisk Holding is 1.04 times more volatile than Dampskibsselskabet Norden AS. It trades about -0.11 of its potential returns per unit of risk. Dampskibsselskabet Norden AS is currently generating about -0.16 per unit of risk. If you would invest 11,280 in Nilfisk Holding AS on September 3, 2024 and sell it today you would lose (620.00) from holding Nilfisk Holding AS or give up 5.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nilfisk Holding AS vs. Dampskibsselskabet Norden AS
Performance |
| Timeline |
| Nilfisk Holding AS |
| Dampskibsselskabet |
Nilfisk Holding and Dampskibsselskabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nilfisk Holding and Dampskibsselskabet
The main advantage of trading using opposite Nilfisk Holding and Dampskibsselskabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nilfisk Holding position performs unexpectedly, Dampskibsselskabet 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 Dampskibsselskabet will offset losses from the drop in Dampskibsselskabet's long position.| Nilfisk Holding vs. NKT AS | Nilfisk Holding vs. ISS AS | Nilfisk Holding vs. Demant AS | Nilfisk Holding vs. Matas AS |
| Dampskibsselskabet vs. TORM plc | Dampskibsselskabet vs. FLSmidth Co | Dampskibsselskabet vs. NKT AS | Dampskibsselskabet vs. ALK Abell 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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