Correlation Between Trifork Holding and Zealand Pharma
Can any of the company-specific risk be diversified away by investing in both Trifork Holding and Zealand Pharma 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 Trifork Holding and Zealand Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trifork Holding AG and Zealand Pharma AS, you can compare the effects of market volatilities on Trifork Holding and Zealand Pharma 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 Trifork Holding with a short position of Zealand Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trifork Holding and Zealand Pharma.
Diversification Opportunities for Trifork Holding and Zealand Pharma
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trifork and Zealand is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Trifork Holding AG and Zealand Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zealand Pharma AS and Trifork Holding 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 Trifork Holding AG are associated (or correlated) with Zealand Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zealand Pharma AS has no effect on the direction of Trifork Holding i.e., Trifork Holding and Zealand Pharma go up and down completely randomly.
Pair Corralation between Trifork Holding and Zealand Pharma
Assuming the 90 days trading horizon Trifork Holding AG is expected to under-perform the Zealand Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Trifork Holding AG is 1.72 times less risky than Zealand Pharma. The stock trades about -0.05 of its potential returns per unit of risk. The Zealand Pharma AS is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 34,040 in Zealand Pharma AS on August 29, 2024 and sell it today you would earn a total of 38,260 from holding Zealand Pharma AS or generate 112.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trifork Holding AG vs. Zealand Pharma AS
Performance |
| Timeline |
| Trifork Holding AG |
| Zealand Pharma AS |
Trifork Holding and Zealand Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trifork Holding and Zealand Pharma
The main advantage of trading using opposite Trifork Holding and Zealand Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trifork Holding position performs unexpectedly, Zealand Pharma 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 Zealand Pharma will offset losses from the drop in Zealand Pharma's long position.| Trifork Holding vs. Netcompany Group AS | Trifork Holding vs. cBrain AS | Trifork Holding vs. ALK Abell AS | Trifork Holding vs. Green Hydrogen Systems |
| Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. Ambu AS | Zealand Pharma vs. Genmab AS | Zealand Pharma vs. ALK Abell 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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