Correlation Between PFA Invest and HusCompagniet
Can any of the company-specific risk be diversified away by investing in both PFA Invest and HusCompagniet 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 PFA Invest and HusCompagniet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PFA Invest Kreditobligationer and HusCompagniet AS, you can compare the effects of market volatilities on PFA Invest and HusCompagniet 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 PFA Invest with a short position of HusCompagniet. Check out your portfolio center. Please also check ongoing floating volatility patterns of PFA Invest and HusCompagniet.
Diversification Opportunities for PFA Invest and HusCompagniet
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PFA and HusCompagniet is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PFA Invest Kreditobligationer and HusCompagniet AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HusCompagniet AS and PFA Invest 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 PFA Invest Kreditobligationer are associated (or correlated) with HusCompagniet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HusCompagniet AS has no effect on the direction of PFA Invest i.e., PFA Invest and HusCompagniet go up and down completely randomly.
Pair Corralation between PFA Invest and HusCompagniet
Assuming the 90 days trading horizon PFA Invest is expected to generate 4.39 times less return on investment than HusCompagniet. But when comparing it to its historical volatility, PFA Invest Kreditobligationer is 11.6 times less risky than HusCompagniet. It trades about 0.16 of its potential returns per unit of risk. HusCompagniet AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,600 in HusCompagniet AS on September 3, 2024 and sell it today you would earn a total of 1,300 from holding HusCompagniet AS or generate 28.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PFA Invest Kreditobligationer vs. HusCompagniet AS
Performance |
| Timeline |
| PFA Invest Kreditobl |
| HusCompagniet AS |
PFA Invest and HusCompagniet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PFA Invest and HusCompagniet
The main advantage of trading using opposite PFA Invest and HusCompagniet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PFA Invest position performs unexpectedly, HusCompagniet 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 HusCompagniet will offset losses from the drop in HusCompagniet's long position.| PFA Invest vs. Danske Andelskassers Bank | PFA Invest vs. Nordea Bank Abp | PFA Invest vs. Laan Spar Bank | PFA Invest vs. Moens Bank AS |
| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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