Correlation Between Skjern Bank and DecideAct
Can any of the company-specific risk be diversified away by investing in both Skjern Bank and DecideAct 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 Skjern Bank and DecideAct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skjern Bank AS and DecideAct AS, you can compare the effects of market volatilities on Skjern Bank and DecideAct 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 Skjern Bank with a short position of DecideAct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and DecideAct.
Diversification Opportunities for Skjern Bank and DecideAct
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Skjern and DecideAct is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and DecideAct AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecideAct AS and Skjern Bank 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 Skjern Bank AS are associated (or correlated) with DecideAct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecideAct AS has no effect on the direction of Skjern Bank i.e., Skjern Bank and DecideAct go up and down completely randomly.
Pair Corralation between Skjern Bank and DecideAct
Assuming the 90 days trading horizon Skjern Bank AS is expected to under-perform the DecideAct. But the stock apears to be less risky and, when comparing its historical volatility, Skjern Bank AS is 7.15 times less risky than DecideAct. The stock trades about -0.3 of its potential returns per unit of risk. The DecideAct AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 183.00 in DecideAct AS on August 29, 2024 and sell it today you would lose (3.00) from holding DecideAct AS or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skjern Bank AS vs. DecideAct AS
Performance |
| Timeline |
| Skjern Bank AS |
| DecideAct AS |
Skjern Bank and DecideAct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and DecideAct
The main advantage of trading using opposite Skjern Bank and DecideAct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank position performs unexpectedly, DecideAct 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 DecideAct will offset losses from the drop in DecideAct's long position.| Skjern Bank vs. Dataproces Group AS | Skjern Bank vs. cBrain AS | Skjern Bank vs. ALK Abell AS | Skjern Bank vs. ChemoMetec AS |
| DecideAct vs. Skjern Bank AS | DecideAct vs. Scandinavian Medical Solutions | DecideAct vs. Lollands Bank | DecideAct vs. Alefarm Brewing 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |