Correlation Between PF Atlantic and Nykredit Invest

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

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

Diversification Opportunities for PF Atlantic and Nykredit Invest

0.8

Correlation Coefficient

PF Atlantic  Nykredit Invest

Very poor diversification

The 3 months correlation between ATLA-DKK and Nykredit is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding PF Atlantic Petroleum and Nykredit Invest Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Danske and PF Atlantic 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 PF Atlantic Petroleum 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 Danske has no effect on the direction of PF Atlantic i.e., PF Atlantic and Nykredit Invest go up and down completely randomly.

Pair Corralation between PF Atlantic and Nykredit Invest

Assuming the 90 days trading horizon PF Atlantic Petroleum is expected to under-perform the Nykredit Invest. In addition to that, PF Atlantic is 4.62 times more volatile than Nykredit Invest Danske. It trades about -0.14 of its total potential returns per unit of risk. Nykredit Invest Danske is currently generating about -0.1 per unit of volatility. If you would invest  20,745  in Nykredit Invest Danske on October 8, 2024 and sell it today you would lose (1,250) from holding Nykredit Invest Danske or give up 6.03% of portfolio value over 90 days.

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

PF Atlantic Petroleum  vs.  Nykredit Invest Danske

PF Atlantic Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PF Atlantic Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Nykredit Invest Danske

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nykredit Invest Danske has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Nykredit Invest is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PF Atlantic and Nykredit Invest

The main advantage of trading using opposite PF Atlantic and Nykredit Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PF Atlantic 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.

The idea behind PF Atlantic Petroleum and Nykredit Invest Danske 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.

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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.