Correlation Between BankInvest Hojrentelande and LUXOR-B

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

By analyzing existing cross correlation between BankInvest Hojrentelande and Investeringsselskabet Luxor AS, you can compare the effects of market volatilities on BankInvest Hojrentelande and LUXOR-B 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 BankInvest Hojrentelande with a short position of LUXOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Hojrentelande and LUXOR-B.

Diversification Opportunities for BankInvest Hojrentelande and LUXOR-B

-0.85

Correlation Coefficient

BankInvest Hojrentelande  LUXOR-B

Pay attention - limited upside

The 3 months correlation between BankInvest and LUXOR-B is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Hojrentelande and Investeringsselskabet Luxor AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsselskabet and BankInvest Hojrentelande 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 BankInvest Hojrentelande are associated (or correlated) with LUXOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsselskabet has no effect on the direction of BankInvest Hojrentelande i.e., BankInvest Hojrentelande and LUXOR-B go up and down completely randomly.

Pair Corralation between BankInvest Hojrentelande and LUXOR-B

Assuming the 90 days trading horizon BankInvest Hojrentelande is expected to generate 0.1 times more return on investment than LUXOR-B. However, BankInvest Hojrentelande is 9.63 times less risky than LUXOR-B. It trades about 0.1 of its potential returns per unit of risk. Investeringsselskabet Luxor AS is currently generating about -0.09 per unit of risk. If you would invest  5,248  in BankInvest Hojrentelande on December 28, 2024 and sell it today you would earn a total of  100.00  from holding BankInvest Hojrentelande or generate 1.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

BankInvest Hojrentelande  vs.  Investeringsselskabet Luxor AS

BankInvest Hojrentelande

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Hojrentelande are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong primary indicators, BankInvest Hojrentelande is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Investeringsselskabet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Investeringsselskabet Luxor AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BankInvest Hojrentelande and LUXOR-B

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

The idea behind BankInvest Hojrentelande and Investeringsselskabet Luxor 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.