Correlation Between Tryg AS and Hvidbjerg Bank
Can any of the company-specific risk be diversified away by investing in both Tryg AS and Hvidbjerg 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 Tryg AS and Hvidbjerg Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tryg AS and Hvidbjerg Bank, you can compare the effects of market volatilities on Tryg AS and Hvidbjerg 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 Tryg AS with a short position of Hvidbjerg Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tryg AS and Hvidbjerg Bank.
Diversification Opportunities for Tryg AS and Hvidbjerg Bank
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tryg and Hvidbjerg is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tryg AS and Hvidbjerg Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hvidbjerg Bank and Tryg AS 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 Tryg AS are associated (or correlated) with Hvidbjerg Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hvidbjerg Bank has no effect on the direction of Tryg AS i.e., Tryg AS and Hvidbjerg Bank go up and down completely randomly.
Pair Corralation between Tryg AS and Hvidbjerg Bank
Assuming the 90 days trading horizon Tryg AS is expected to generate 0.73 times more return on investment than Hvidbjerg Bank. However, Tryg AS is 1.37 times less risky than Hvidbjerg Bank. It trades about 0.08 of its potential returns per unit of risk. Hvidbjerg Bank is currently generating about 0.04 per unit of risk. If you would invest 13,299 in Tryg AS on September 1, 2024 and sell it today you would earn a total of 2,961 from holding Tryg AS or generate 22.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Tryg AS vs. Hvidbjerg Bank
Performance |
| Timeline |
| Tryg AS |
| Hvidbjerg Bank |
Tryg AS and Hvidbjerg Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tryg AS and Hvidbjerg Bank
The main advantage of trading using opposite Tryg AS and Hvidbjerg Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tryg AS position performs unexpectedly, Hvidbjerg 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 Hvidbjerg Bank will offset losses from the drop in Hvidbjerg Bank's long position.The idea behind Tryg AS and Hvidbjerg Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hvidbjerg Bank vs. Skjern Bank AS | Hvidbjerg Bank vs. Lollands Bank | Hvidbjerg Bank vs. Djurslands Bank | Hvidbjerg Bank vs. Nordfyns Bank 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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