Correlation Between Vestjysk Bank and Lollands Bank
Can any of the company-specific risk be diversified away by investing in both Vestjysk Bank and Lollands 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 Vestjysk Bank and Lollands Bank 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 Lollands Bank, you can compare the effects of market volatilities on Vestjysk Bank and Lollands 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 Vestjysk Bank with a short position of Lollands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and Lollands Bank.
Diversification Opportunities for Vestjysk Bank and Lollands Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vestjysk and Lollands is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk Bank AS and Lollands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lollands Bank 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 Lollands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lollands Bank has no effect on the direction of Vestjysk Bank i.e., Vestjysk Bank and Lollands Bank go up and down completely randomly.
Pair Corralation between Vestjysk Bank and Lollands Bank
Assuming the 90 days trading horizon Vestjysk Bank AS is expected to generate 0.83 times more return on investment than Lollands Bank. However, Vestjysk Bank AS is 1.2 times less risky than Lollands Bank. It trades about 0.06 of its potential returns per unit of risk. Lollands Bank is currently generating about 0.02 per unit of risk. If you would invest 333.00 in Vestjysk Bank AS on November 5, 2024 and sell it today you would earn a total of 117.00 from holding Vestjysk Bank AS or generate 35.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestjysk Bank AS vs. Lollands Bank
Performance |
| Timeline |
| Vestjysk Bank AS |
| Lollands Bank |
Vestjysk Bank and Lollands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and Lollands Bank
The main advantage of trading using opposite Vestjysk Bank and Lollands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk Bank position performs unexpectedly, Lollands 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 Lollands Bank will offset losses from the drop in Lollands Bank'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 |
| Lollands Bank vs. Skjern Bank AS | Lollands Bank vs. Kreditbanken AS | Lollands Bank vs. Djurslands Bank | Lollands Bank vs. Groenlandsbanken 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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