Correlation Between Vestas Wind and Fynske Bank
Can any of the company-specific risk be diversified away by investing in both Vestas Wind and Fynske 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 Vestas Wind and Fynske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestas Wind Systems and Fynske Bank AS, you can compare the effects of market volatilities on Vestas Wind and Fynske 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 Vestas Wind with a short position of Fynske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and Fynske Bank.
Diversification Opportunities for Vestas Wind and Fynske Bank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vestas and Fynske is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems and Fynske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fynske Bank AS and Vestas Wind 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 Vestas Wind Systems are associated (or correlated) with Fynske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fynske Bank AS has no effect on the direction of Vestas Wind i.e., Vestas Wind and Fynske Bank go up and down completely randomly.
Pair Corralation between Vestas Wind and Fynske Bank
Assuming the 90 days trading horizon Vestas Wind Systems is expected to generate 1.28 times more return on investment than Fynske Bank. However, Vestas Wind is 1.28 times more volatile than Fynske Bank AS. It trades about 0.09 of its potential returns per unit of risk. Fynske Bank AS is currently generating about 0.02 per unit of risk. If you would invest 9,496 in Vestas Wind Systems on November 27, 2024 and sell it today you would earn a total of 404.00 from holding Vestas Wind Systems or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestas Wind Systems vs. Fynske Bank AS
Performance |
| Timeline |
| Vestas Wind Systems |
| Fynske Bank AS |
Vestas Wind and Fynske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestas Wind and Fynske Bank
The main advantage of trading using opposite Vestas Wind and Fynske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind position performs unexpectedly, Fynske 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 Fynske Bank will offset losses from the drop in Fynske Bank's long position.| Vestas Wind vs. Orsted AS | Vestas Wind vs. Danske Bank AS | Vestas Wind vs. Bavarian Nordic | Vestas Wind vs. DSV Panalpina AS |
| Fynske Bank vs. Skjern Bank AS | Fynske Bank vs. Djurslands Bank | Fynske Bank vs. Sparekassen Sjaelland Fyn AS | Fynske 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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