Correlation Between Vestjysk Bank and BankIn Bredygt
Can any of the company-specific risk be diversified away by investing in both Vestjysk Bank and BankIn Bredygt 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 Vestjysk Bank and BankIn Bredygt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestjysk Bank AS and BankIn Bredygt Klimaakt, you can compare the effects of market volatilities on Vestjysk Bank and BankIn Bredygt 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 Vestjysk Bank with a short position of BankIn Bredygt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and BankIn Bredygt.
Diversification Opportunities for Vestjysk Bank and BankIn Bredygt
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vestjysk and BankIn is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk Bank AS and BankIn Bredygt Klimaakt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankIn Bredygt Klimaakt and Vestjysk 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 Vestjysk Bank AS are associated (or correlated) with BankIn Bredygt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankIn Bredygt Klimaakt has no effect on the direction of Vestjysk Bank i.e., Vestjysk Bank and BankIn Bredygt go up and down completely randomly.
Pair Corralation between Vestjysk Bank and BankIn Bredygt
Assuming the 90 days trading horizon Vestjysk Bank AS is expected to generate 0.71 times more return on investment than BankIn Bredygt. However, Vestjysk Bank AS is 1.41 times less risky than BankIn Bredygt. It trades about 0.5 of its potential returns per unit of risk. BankIn Bredygt Klimaakt is currently generating about -0.06 per unit of risk. If you would invest 449.00 in Vestjysk Bank AS on November 27, 2024 and sell it today you would earn a total of 26.00 from holding Vestjysk Bank AS or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
Vestjysk Bank AS vs. BankIn Bredygt Klimaakt
Performance |
| Timeline |
| Vestjysk Bank AS |
| BankIn Bredygt Klimaakt |
Vestjysk Bank and BankIn Bredygt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and BankIn Bredygt
The main advantage of trading using opposite Vestjysk Bank and BankIn Bredygt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk Bank position performs unexpectedly, BankIn Bredygt 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 BankIn Bredygt will offset losses from the drop in BankIn Bredygt's long position.| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
| BankIn Bredygt vs. Vestjysk Bank AS | BankIn Bredygt vs. NTG Nordic Transport | BankIn Bredygt vs. Formuepleje Mix Medium | BankIn Bredygt vs. Strategic Investments 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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