Correlation Between PFA Invest and ISS AS
Can any of the company-specific risk be diversified away by investing in both PFA Invest and ISS AS 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 ISS AS 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 ISS AS, you can compare the effects of market volatilities on PFA Invest and ISS AS 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 ISS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PFA Invest and ISS AS.
Diversification Opportunities for PFA Invest and ISS AS
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PFA and ISS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PFA Invest Kreditobligationer and ISS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISS 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 ISS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISS AS has no effect on the direction of PFA Invest i.e., PFA Invest and ISS AS go up and down completely randomly.
Pair Corralation between PFA Invest and ISS AS
Assuming the 90 days trading horizon PFA Invest Kreditobligationer is expected to generate 0.08 times more return on investment than ISS AS. However, PFA Invest Kreditobligationer is 12.52 times less risky than ISS AS. It trades about 0.22 of its potential returns per unit of risk. ISS AS is currently generating about -0.16 per unit of risk. If you would invest 10,427 in PFA Invest Kreditobligationer on August 29, 2024 and sell it today you would earn a total of 52.00 from holding PFA Invest Kreditobligationer or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PFA Invest Kreditobligationer vs. ISS AS
Performance |
| Timeline |
| PFA Invest Kreditobl |
| ISS AS |
PFA Invest and ISS AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PFA Invest and ISS AS
The main advantage of trading using opposite PFA Invest and ISS AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PFA Invest position performs unexpectedly, ISS AS 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 ISS AS will offset losses from the drop in ISS AS's long position.| PFA Invest vs. Novo Nordisk AS | PFA Invest vs. Nordea Bank Abp | PFA Invest vs. DSV Panalpina AS | PFA Invest vs. AP Mller |
| ISS AS vs. North Media AS | ISS AS vs. HH International AS | ISS AS vs. Per Aarsleff Holding | ISS AS vs. First Farms 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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