Correlation Between Skjern Bank and Kreditbanken
Can any of the company-specific risk be diversified away by investing in both Skjern Bank and Kreditbanken 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 Kreditbanken 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 Kreditbanken AS, you can compare the effects of market volatilities on Skjern Bank and Kreditbanken 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 Kreditbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and Kreditbanken.
Diversification Opportunities for Skjern Bank and Kreditbanken
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skjern and Kreditbanken is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank AS and Kreditbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kreditbanken 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 Kreditbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kreditbanken AS has no effect on the direction of Skjern Bank i.e., Skjern Bank and Kreditbanken go up and down completely randomly.
Pair Corralation between Skjern Bank and Kreditbanken
Assuming the 90 days trading horizon Skjern Bank AS is expected to under-perform the Kreditbanken. But the stock apears to be less risky and, when comparing its historical volatility, Skjern Bank AS is 1.05 times less risky than Kreditbanken. The stock trades about -0.3 of its potential returns per unit of risk. The Kreditbanken AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 505,000 in Kreditbanken AS on August 29, 2024 and sell it today you would lose (7,000) from holding Kreditbanken AS or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Skjern Bank AS vs. Kreditbanken AS
Performance |
| Timeline |
| Skjern Bank AS |
| Kreditbanken AS |
Skjern Bank and Kreditbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skjern Bank and Kreditbanken
The main advantage of trading using opposite Skjern Bank and Kreditbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank position performs unexpectedly, Kreditbanken 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 Kreditbanken will offset losses from the drop in Kreditbanken's long position.| Skjern Bank vs. Sydbank AS | Skjern Bank vs. Jyske Bank AS | Skjern Bank vs. Alm Brand | Skjern Bank vs. Nordea Bank Abp |
| Kreditbanken vs. Sydbank AS | Kreditbanken vs. Jyske Bank AS | Kreditbanken vs. Alm Brand | Kreditbanken vs. Nordea Bank Abp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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