Correlation Between Vestjysk Bank and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Vestjysk Bank and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on Vestjysk Bank and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and Strategic Investments.
Diversification Opportunities for Vestjysk Bank and Strategic Investments
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vestjysk and Strategic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk Bank AS and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Vestjysk Bank i.e., Vestjysk Bank and Strategic Investments go up and down completely randomly.
Pair Corralation between Vestjysk Bank and Strategic Investments
Assuming the 90 days trading horizon Vestjysk Bank AS is expected to generate 0.43 times more return on investment than Strategic Investments. However, Vestjysk Bank AS is 2.31 times less risky than Strategic Investments. It trades about 0.08 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.24 per unit of risk. If you would invest 417.00 in Vestjysk Bank AS on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Vestjysk Bank AS or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestjysk Bank AS vs. Strategic Investments AS
Performance |
| Timeline |
| Vestjysk Bank AS |
| Strategic Investments |
Vestjysk Bank and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and Strategic Investments
The main advantage of trading using opposite Vestjysk Bank and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk Bank position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing 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 Stocks Directory module to find actively traded stocks across global markets.
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