Correlation Between North Media and Danske Invest
Can any of the company-specific risk be diversified away by investing in both North Media 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 North Media and Danske Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Media AS and Danske Invest Danmark, you can compare the effects of market volatilities on North Media 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 North Media with a short position of Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and Danske Invest.
Diversification Opportunities for North Media and Danske Invest
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between North and Danske is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Danske Invest Danmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest Danmark and North Media 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 North Media 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 Danmark has no effect on the direction of North Media i.e., North Media and Danske Invest go up and down completely randomly.
Pair Corralation between North Media and Danske Invest
Assuming the 90 days trading horizon North Media AS is expected to under-perform the Danske Invest. In addition to that, North Media is 1.74 times more volatile than Danske Invest Danmark. It trades about -0.04 of its total potential returns per unit of risk. Danske Invest Danmark is currently generating about 0.01 per unit of volatility. If you would invest 14,260 in Danske Invest Danmark on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Danske Invest Danmark or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Media AS vs. Danske Invest Danmark
Performance |
| Timeline |
| North Media AS |
| Danske Invest Danmark |
North Media and Danske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Media and Danske Invest
The main advantage of trading using opposite North Media and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media 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.| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
| Danske Invest vs. North Media AS | Danske Invest vs. Jyske Bank AS | Danske Invest vs. NTG Nordic Transport | Danske Invest vs. Kreditbanken 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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