Correlation Between BankInvest Emerging and BankInvest Danske

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

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

Diversification Opportunities for BankInvest Emerging and BankInvest Danske

0.49

Correlation Coefficient

BankInvest Emerging  BankInvest Danske

Very weak diversification

The 3 months correlation between BankInvest and BankInvest is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Emerging and BankInvest Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Danske and BankInvest Emerging 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 Emerging are associated (or correlated) with BankInvest Danske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Danske has no effect on the direction of BankInvest Emerging i.e., BankInvest Emerging and BankInvest Danske go up and down completely randomly.

Pair Corralation between BankInvest Emerging and BankInvest Danske

Assuming the 90 days trading horizon BankInvest Emerging is expected to generate 0.5 times more return on investment than BankInvest Danske. However, BankInvest Emerging is 2.0 times less risky than BankInvest Danske. It trades about 0.04 of its potential returns per unit of risk. BankInvest Danske is currently generating about -0.05 per unit of risk. If you would invest  9,843  in BankInvest Emerging on December 29, 2024 and sell it today you would earn a total of  101.00  from holding BankInvest Emerging or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

BankInvest Emerging  vs.  BankInvest Danske

BankInvest Emerging

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Emerging are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, BankInvest Emerging is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

BankInvest Danske

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankInvest Danske has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong fundamental indicators, BankInvest Danske is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BankInvest Emerging and BankInvest Danske

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

The idea behind BankInvest Emerging and BankInvest 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.