Correlation Between BankInvest Hjt and BankInvest Optima

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

By analyzing existing cross correlation between BankInvest Hjt Udbytte and BankInvest Optima 30, you can compare the effects of market volatilities on BankInvest Hjt and BankInvest Optima 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 Hjt with a short position of BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Hjt and BankInvest Optima.

Diversification Opportunities for BankInvest Hjt and BankInvest Optima

0.27

Correlation Coefficient

BankInvest Hjt  BankInvest Optima

Modest diversification

The 3 months correlation between BankInvest and BankInvest is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Hjt Udbytte and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima and BankInvest Hjt 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 Hjt Udbytte are associated (or correlated) with BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of BankInvest Hjt i.e., BankInvest Hjt and BankInvest Optima go up and down completely randomly.

Pair Corralation between BankInvest Hjt and BankInvest Optima

Assuming the 90 days trading horizon BankInvest Hjt is expected to generate 1.02 times less return on investment than BankInvest Optima. In addition to that, BankInvest Hjt is 1.61 times more volatile than BankInvest Optima 30. It trades about 0.05 of its total potential returns per unit of risk. BankInvest Optima 30 is currently generating about 0.09 per unit of volatility. If you would invest  9,564  in BankInvest Optima 30 on October 5, 2024 and sell it today you would earn a total of  1,596  from holding BankInvest Optima 30 or generate 16.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.85%
Values	Daily Returns

BankInvest Hjt Udbytte  vs.  BankInvest Optima 30

BankInvest Hjt Udbytte

Risk-Adjusted Performance

0 of 100

Very Weak

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

BankInvest Optima

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BankInvest Optima 30 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, BankInvest Optima is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BankInvest Hjt and BankInvest Optima

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

The idea behind BankInvest Hjt Udbytte and BankInvest Optima 30 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.