Correlation Between Pandora AS and Aalborg Boldspilklub
Can any of the company-specific risk be diversified away by investing in both Pandora AS and Aalborg Boldspilklub 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 Pandora AS and Aalborg Boldspilklub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pandora AS and Aalborg Boldspilklub AS, you can compare the effects of market volatilities on Pandora AS and Aalborg Boldspilklub 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 Pandora AS with a short position of Aalborg Boldspilklub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora AS and Aalborg Boldspilklub.
Diversification Opportunities for Pandora AS and Aalborg Boldspilklub
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pandora and Aalborg is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS and Aalborg Boldspilklub AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalborg Boldspilklub and Pandora AS 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 Pandora AS are associated (or correlated) with Aalborg Boldspilklub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalborg Boldspilklub has no effect on the direction of Pandora AS i.e., Pandora AS and Aalborg Boldspilklub go up and down completely randomly.
Pair Corralation between Pandora AS and Aalborg Boldspilklub
Assuming the 90 days trading horizon Pandora AS is expected to generate 0.57 times more return on investment than Aalborg Boldspilklub. However, Pandora AS is 1.76 times less risky than Aalborg Boldspilklub. It trades about 0.43 of its potential returns per unit of risk. Aalborg Boldspilklub AS is currently generating about -0.05 per unit of risk. If you would invest 109,500 in Pandora AS on September 19, 2024 and sell it today you would earn a total of 17,600 from holding Pandora AS or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pandora AS vs. Aalborg Boldspilklub AS
Performance |
| Timeline |
| Pandora AS |
| Aalborg Boldspilklub |
Pandora AS and Aalborg Boldspilklub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pandora AS and Aalborg Boldspilklub
The main advantage of trading using opposite Pandora AS and Aalborg Boldspilklub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pandora AS position performs unexpectedly, Aalborg Boldspilklub 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 Aalborg Boldspilklub will offset losses from the drop in Aalborg Boldspilklub's long position.| Pandora AS vs. Ralph Lauren Corp | Pandora AS vs. Tapestry | Pandora AS vs. PVH Corp | Pandora AS vs. Levi Strauss Co |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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