Correlation Between Vestjysk Bank and Nykredit Invest
Can any of the company-specific risk be diversified away by investing in both Vestjysk Bank and Nykredit Invest 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 Nykredit Invest 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 Nykredit Invest Korte, you can compare the effects of market volatilities on Vestjysk Bank and Nykredit Invest 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 Nykredit Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and Nykredit Invest.
Diversification Opportunities for Vestjysk Bank and Nykredit Invest
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vestjysk and Nykredit is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk Bank AS and Nykredit Invest Korte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Korte 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 Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Korte has no effect on the direction of Vestjysk Bank i.e., Vestjysk Bank and Nykredit Invest go up and down completely randomly.
Pair Corralation between Vestjysk Bank and Nykredit Invest
Assuming the 90 days trading horizon Vestjysk Bank AS is expected to generate 12.5 times more return on investment than Nykredit Invest. However, Vestjysk Bank is 12.5 times more volatile than Nykredit Invest Korte. It trades about 0.29 of its potential returns per unit of risk. Nykredit Invest Korte is currently generating about 0.01 per unit of risk. If you would invest 428.00 in Vestjysk Bank AS on October 25, 2024 and sell it today you would earn a total of 21.00 from holding Vestjysk Bank AS or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Vestjysk Bank AS vs. Nykredit Invest Korte
Performance |
| Timeline |
| Vestjysk Bank AS |
| Nykredit Invest Korte |
Vestjysk Bank and Nykredit Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and Nykredit Invest
The main advantage of trading using opposite Vestjysk Bank and Nykredit Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk Bank position performs unexpectedly, Nykredit Invest 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 Nykredit Invest will offset losses from the drop in Nykredit Invest'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 |
| Nykredit Invest vs. North Media AS | Nykredit Invest vs. Moens Bank AS | Nykredit Invest vs. Skjern Bank AS | Nykredit Invest vs. BankInv Kort HY |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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