Correlation Between Scandinavian Medical and Djurslands Bank
Can any of the company-specific risk be diversified away by investing in both Scandinavian Medical and Djurslands Bank 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 Scandinavian Medical and Djurslands Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Medical Solutions and Djurslands Bank, you can compare the effects of market volatilities on Scandinavian Medical and Djurslands Bank 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 Scandinavian Medical with a short position of Djurslands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Medical and Djurslands Bank.
Diversification Opportunities for Scandinavian Medical and Djurslands Bank
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandinavian and Djurslands is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Medical Solutions and Djurslands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djurslands Bank and Scandinavian Medical 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 Scandinavian Medical Solutions are associated (or correlated) with Djurslands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Djurslands Bank has no effect on the direction of Scandinavian Medical i.e., Scandinavian Medical and Djurslands Bank go up and down completely randomly.
Pair Corralation between Scandinavian Medical and Djurslands Bank
Assuming the 90 days trading horizon Scandinavian Medical is expected to generate 12.19 times less return on investment than Djurslands Bank. In addition to that, Scandinavian Medical is 2.54 times more volatile than Djurslands Bank. It trades about 0.01 of its total potential returns per unit of risk. Djurslands Bank is currently generating about 0.16 per unit of volatility. If you would invest 52,500 in Djurslands Bank on September 19, 2024 and sell it today you would earn a total of 4,500 from holding Djurslands Bank or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Medical Solutions vs. Djurslands Bank
Performance |
| Timeline |
| Scandinavian Medical |
| Djurslands Bank |
Scandinavian Medical and Djurslands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Medical and Djurslands Bank
The main advantage of trading using opposite Scandinavian Medical and Djurslands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Medical position performs unexpectedly, Djurslands Bank 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 Djurslands Bank will offset losses from the drop in Djurslands Bank's long position.| Scandinavian Medical vs. Novo Nordisk AS | Scandinavian Medical vs. Nordea Bank Abp | Scandinavian Medical vs. DSV Panalpina AS | Scandinavian Medical vs. AP Mller |
| Djurslands Bank vs. FLSmidth Co | Djurslands Bank vs. Danske Bank AS | Djurslands Bank vs. ISS AS | Djurslands Bank vs. DSV Panalpina 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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