Correlation Between OMX Copenhagen and LED IBond
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By analyzing existing cross correlation between OMX Copenhagen All and LED iBond International, you can compare the effects of market volatilities on OMX Copenhagen and LED IBond 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 OMX Copenhagen with a short position of LED IBond. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Copenhagen and LED IBond.
Diversification Opportunities for OMX Copenhagen and LED IBond
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OMX and LED is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding OMX Copenhagen All and LED iBond International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LED iBond International and OMX Copenhagen 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 OMX Copenhagen All are associated (or correlated) with LED IBond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LED iBond International has no effect on the direction of OMX Copenhagen i.e., OMX Copenhagen and LED IBond go up and down completely randomly.
Pair Corralation between OMX Copenhagen and LED IBond
Assuming the 90 days trading horizon OMX Copenhagen All is expected to generate 0.25 times more return on investment than LED IBond. However, OMX Copenhagen All is 4.01 times less risky than LED IBond. It trades about 0.13 of its potential returns per unit of risk. LED iBond International is currently generating about -0.16 per unit of risk. If you would invest 154,419 in OMX Copenhagen All on November 27, 2024 and sell it today you would earn a total of 4,755 from holding OMX Copenhagen All or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OMX Copenhagen All vs. LED iBond International
Performance |
| Timeline |
OMX Copenhagen and LED IBond Volatility Contrast
Predicted Return Density |
| Returns |
OMX Copenhagen All
Pair trading matchups for OMX Copenhagen
LED iBond International
Pair trading matchups for LED IBond
Pair Trading with OMX Copenhagen and LED IBond
The main advantage of trading using opposite OMX Copenhagen and LED IBond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Copenhagen position performs unexpectedly, LED IBond 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 LED IBond will offset losses from the drop in LED IBond's long position.| OMX Copenhagen vs. Ringkjoebing Landbobank AS | OMX Copenhagen vs. Nordinvestments AS | OMX Copenhagen vs. Fynske Bank AS | OMX Copenhagen vs. NTG Nordic Transport |
| LED IBond vs. Scandinavian Medical Solutions | LED IBond vs. Prime Office AS | LED IBond vs. Nordinvestments AS | LED IBond 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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