Correlation Between Bactiquant and Vestjysk Bank

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

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

Diversification Opportunities for Bactiquant and Vestjysk Bank

0.73

Correlation Coefficient

Bactiquant  Vestjysk Bank

Poor diversification

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

Pair Corralation between Bactiquant and Vestjysk Bank

Assuming the 90 days trading horizon Bactiquant AS is expected to under-perform the Vestjysk Bank. In addition to that, Bactiquant is 4.63 times more volatile than Vestjysk Bank AS. It trades about -0.22 of its total potential returns per unit of risk. Vestjysk Bank AS is currently generating about -0.12 per unit of volatility. If you would invest  415.00  in Vestjysk Bank AS on September 13, 2024 and sell it today you would lose (7.00) from holding Vestjysk Bank AS or give up 1.69% of portfolio value over 90 days.

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

Bactiquant AS  vs.  Vestjysk Bank AS

Bactiquant AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bactiquant AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Vestjysk Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vestjysk Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vestjysk Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bactiquant and Vestjysk Bank

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

The idea behind Bactiquant AS and Vestjysk Bank AS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.