Correlation Between Agillic AS and Danish Aerospace

Can any of the company-specific risk be diversified away by investing in both Agillic AS and Danish Aerospace 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 Agillic AS and Danish Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agillic AS and Danish Aerospace, you can compare the effects of market volatilities on Agillic AS and Danish Aerospace 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 Agillic AS with a short position of Danish Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agillic AS and Danish Aerospace.

Diversification Opportunities for Agillic AS and Danish Aerospace

0.73

Correlation Coefficient

Agillic AS  Danish Aerospace

Poor diversification

The 3 months correlation between Agillic and Danish is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Agillic AS and Danish Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danish Aerospace and Agillic AS 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 Agillic AS are associated (or correlated) with Danish Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danish Aerospace has no effect on the direction of Agillic AS i.e., Agillic AS and Danish Aerospace go up and down completely randomly.

Pair Corralation between Agillic AS and Danish Aerospace

Assuming the 90 days trading horizon Agillic AS is expected to generate 0.32 times more return on investment than Danish Aerospace. However, Agillic AS is 3.12 times less risky than Danish Aerospace. It trades about -0.08 of its potential returns per unit of risk. Danish Aerospace is currently generating about -0.03 per unit of risk. If you would invest  950.00  in Agillic AS on October 6, 2024 and sell it today you would lose (50.00) from holding Agillic AS or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Agillic AS  vs.  Danish Aerospace

Agillic AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agillic AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Danish Aerospace

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Danish Aerospace has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Agillic AS and Danish Aerospace

The main advantage of trading using opposite Agillic AS and Danish Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agillic AS position performs unexpectedly, Danish Aerospace 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 Danish Aerospace will offset losses from the drop in Danish Aerospace's long position.

The idea behind Agillic AS and Danish Aerospace pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.