Correlation Between Skjern Bank and Danske Invest
Can any of the company-specific risk be diversified away by investing in both Skjern Bank and Danske Invest 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 Danske Invest 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 Danske Invest Europa, you can compare the effects of market volatilities on Skjern Bank and Danske Invest 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 Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and Danske Invest.
Diversification Opportunities for Skjern Bank and Danske Invest
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skjern and Danske is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and Danske Invest Europa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest Europa 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 Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest Europa has no effect on the direction of Skjern Bank i.e., Skjern Bank and Danske Invest go up and down completely randomly.
Pair Corralation between Skjern Bank and Danske Invest
Assuming the 90 days trading horizon Skjern Bank AS is expected to generate 2.22 times more return on investment than Danske Invest. However, Skjern Bank is 2.22 times more volatile than Danske Invest Europa. It trades about 0.03 of its potential returns per unit of risk. Danske Invest Europa is currently generating about 0.04 per unit of risk. If you would invest 14,182 in Skjern Bank AS on September 3, 2024 and sell it today you would earn a total of 1,318 from holding Skjern Bank AS or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skjern Bank AS vs. Danske Invest Europa
Performance |
| Timeline |
| Skjern Bank AS |
| Danske Invest Europa |
Skjern Bank and Danske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and Danske Invest
The main advantage of trading using opposite Skjern Bank and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank position performs unexpectedly, Danske Invest 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 Danske Invest will offset losses from the drop in Danske Invest's long position.| Skjern Bank vs. Nordinvestments AS | Skjern Bank vs. BankInvest Value Globale | Skjern Bank vs. Dataproces Group AS | Skjern Bank vs. Sydbank AS |
| Danske Invest vs. Skjern Bank AS | Danske Invest vs. Fynske Bank AS | Danske Invest vs. Nordea Bank Abp | Danske Invest vs. Ringkjoebing Landbobank 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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