Correlation Between Schweizerische Nationalbank and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank and Danske 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 Schweizerische Nationalbank and Danske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizerische Nationalbank and Danske Bank AS, you can compare the effects of market volatilities on Schweizerische Nationalbank and Danske 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 Schweizerische Nationalbank with a short position of Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Danske Bank.
Diversification Opportunities for Schweizerische Nationalbank and Danske Bank
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Schweizerische and Danske is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS and Schweizerische Nationalbank 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 Schweizerische Nationalbank are associated (or correlated) with Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Danske Bank go up and down completely randomly.
Pair Corralation between Schweizerische Nationalbank and Danske Bank
Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Danske Bank. In addition to that, Schweizerische Nationalbank is 1.24 times more volatile than Danske Bank AS. It trades about -0.21 of its total potential returns per unit of risk. Danske Bank AS is currently generating about -0.07 per unit of volatility. If you would invest 1,442 in Danske Bank AS on August 29, 2024 and sell it today you would lose (47.00) from holding Danske Bank AS or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizerische Nationalbank vs. Danske Bank AS
Performance |
| Timeline |
| Schweizerische Nationalbank |
| Danske Bank AS |
Schweizerische Nationalbank and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizerische Nationalbank and Danske Bank
The main advantage of trading using opposite Schweizerische Nationalbank and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank position performs unexpectedly, Danske 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 Danske Bank will offset losses from the drop in Danske Bank's long position.| Schweizerische Nationalbank vs. Israel Discount Bank | Schweizerische Nationalbank vs. Baraboo Bancorporation | Schweizerische Nationalbank vs. Danske Bank AS | Schweizerische Nationalbank vs. Jyske Bank AS |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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