Correlation Between Vestjysk Bank and HusCompagniet
Can any of the company-specific risk be diversified away by investing in both Vestjysk Bank and HusCompagniet 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 HusCompagniet 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 HusCompagniet AS, you can compare the effects of market volatilities on Vestjysk Bank and HusCompagniet 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 HusCompagniet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and HusCompagniet.
Diversification Opportunities for Vestjysk Bank and HusCompagniet
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vestjysk and HusCompagniet is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk Bank AS and HusCompagniet AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HusCompagniet AS 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 HusCompagniet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HusCompagniet AS has no effect on the direction of Vestjysk Bank i.e., Vestjysk Bank and HusCompagniet go up and down completely randomly.
Pair Corralation between Vestjysk Bank and HusCompagniet
Assuming the 90 days trading horizon Vestjysk Bank is expected to generate 1.46 times less return on investment than HusCompagniet. But when comparing it to its historical volatility, Vestjysk Bank AS is 1.68 times less risky than HusCompagniet. It trades about 0.03 of its potential returns per unit of risk. HusCompagniet AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,250 in HusCompagniet AS on September 12, 2024 and sell it today you would earn a total of 650.00 from holding HusCompagniet AS or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestjysk Bank AS vs. HusCompagniet AS
Performance |
| Timeline |
| Vestjysk Bank AS |
| HusCompagniet AS |
Vestjysk Bank and HusCompagniet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and HusCompagniet
The main advantage of trading using opposite Vestjysk Bank and HusCompagniet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk Bank position performs unexpectedly, HusCompagniet 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 HusCompagniet will offset losses from the drop in HusCompagniet'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 |
| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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