Correlation Between Alm Brand and DKINYM

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

By analyzing existing cross correlation between Alm Brand Invest and Investeringsforeningen Danske Invest, you can compare the effects of market volatilities on Alm Brand and DKINYM 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 Alm Brand with a short position of DKINYM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alm Brand and DKINYM.

Diversification Opportunities for Alm Brand and DKINYM

0.0

Correlation Coefficient

Alm Brand  DKINYM

Pay attention - limited upside

The 3 months correlation between Alm and DKINYM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand Invest and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen and Alm Brand 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 Alm Brand Invest are associated (or correlated) with DKINYM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Alm Brand i.e., Alm Brand and DKINYM go up and down completely randomly.

Pair Corralation between Alm Brand and DKINYM

If you would invest  20,432  in Investeringsforeningen Danske Invest on December 2, 2024 and sell it today you would earn a total of  188.00  from holding Investeringsforeningen Danske Invest or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alm Brand Invest  vs.  Investeringsforeningen Danske

Alm Brand Invest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alm Brand Invest has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Alm Brand is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Investeringsforeningen

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong forward indicators, DKINYM is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alm Brand and DKINYM

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

The idea behind Alm Brand Invest and Investeringsforeningen Danske Invest 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..