Correlation Between Skjern Bank and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both Skjern Bank and BankInvest Optima 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 BankInvest Optima 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 BankInvest Optima 10, you can compare the effects of market volatilities on Skjern Bank and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and BankInvest Optima.
Diversification Opportunities for Skjern Bank and BankInvest Optima
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Skjern and BankInvest is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and BankInvest Optima 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Skjern Bank i.e., Skjern Bank and BankInvest Optima go up and down completely randomly.
Pair Corralation between Skjern Bank and BankInvest Optima
Assuming the 90 days trading horizon Skjern Bank AS is expected to under-perform the BankInvest Optima. In addition to that, Skjern Bank is 3.23 times more volatile than BankInvest Optima 10. It trades about -0.37 of its total potential returns per unit of risk. BankInvest Optima 10 is currently generating about 0.22 per unit of volatility. If you would invest 13,645 in BankInvest Optima 10 on August 26, 2024 and sell it today you would earn a total of 145.00 from holding BankInvest Optima 10 or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Skjern Bank AS vs. BankInvest Optima 10
Performance |
| Timeline |
| Skjern Bank AS |
| BankInvest Optima |
Skjern Bank and BankInvest Optima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and BankInvest Optima
The main advantage of trading using opposite Skjern Bank and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima'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 |
| BankInvest Optima vs. MapsPeople AS | BankInvest Optima vs. Penneo AS | BankInvest Optima vs. Dataproces Group AS | BankInvest Optima vs. Orderyoyo 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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