Correlation Between Pandora AS and Demant AS
Can any of the company-specific risk be diversified away by investing in both Pandora AS and Demant 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 Pandora AS and Demant AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pandora AS and Demant AS, you can compare the effects of market volatilities on Pandora AS and Demant 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 Pandora AS with a short position of Demant AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora AS and Demant AS.
Diversification Opportunities for Pandora AS and Demant AS
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pandora and Demant is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS and Demant AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Demant AS 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 Demant AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Demant AS has no effect on the direction of Pandora AS i.e., Pandora AS and Demant AS go up and down completely randomly.
Pair Corralation between Pandora AS and Demant AS
Assuming the 90 days trading horizon Pandora AS is expected to generate 0.72 times more return on investment than Demant AS. However, Pandora AS is 1.38 times less risky than Demant AS. It trades about 0.21 of its potential returns per unit of risk. Demant AS is currently generating about 0.09 per unit of risk. If you would invest 104,850 in Pandora AS on August 29, 2024 and sell it today you would earn a total of 6,850 from holding Pandora AS or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pandora AS vs. Demant AS
Performance |
| Timeline |
| Pandora AS |
| Demant AS |
Pandora AS and Demant AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pandora AS and Demant AS
The main advantage of trading using opposite Pandora AS and Demant AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pandora AS position performs unexpectedly, Demant 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 Demant AS will offset losses from the drop in Demant AS's long position.| Pandora AS vs. Ralph Lauren Corp | Pandora AS vs. Tapestry | Pandora AS vs. PVH Corp | Pandora AS vs. Levi Strauss Co |
| Demant AS vs. GN Store Nord | Demant AS vs. Ambu AS | Demant AS vs. ISS AS | Demant AS vs. ROCKWOOL International 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |