Correlation Between BankInv Kort and BankInvest Value

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

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

Diversification Opportunities for BankInv Kort and BankInvest Value

-0.34

Correlation Coefficient

BankInv Kort  BankInvest Value

Very good diversification

The 3 months correlation between BankInv and BankInvest is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BankInv Kort HY and BankInvest Value Globale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Value Globale and BankInv Kort 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 BankInv Kort HY are associated (or correlated) with BankInvest Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Value Globale has no effect on the direction of BankInv Kort i.e., BankInv Kort and BankInvest Value go up and down completely randomly.

Pair Corralation between BankInv Kort and BankInvest Value

Assuming the 90 days trading horizon BankInv Kort HY is expected to generate 0.12 times more return on investment than BankInvest Value. However, BankInv Kort HY is 8.2 times less risky than BankInvest Value. It trades about 0.07 of its potential returns per unit of risk. BankInvest Value Globale is currently generating about -0.13 per unit of risk. If you would invest  10,320  in BankInv Kort HY on December 28, 2024 and sell it today you would earn a total of  115.00  from holding BankInv Kort HY or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

BankInv Kort HY  vs.  BankInvest Value Globale

BankInv Kort HY

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BankInv Kort HY are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, BankInv Kort is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

BankInvest Value Globale

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankInvest Value Globale 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 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 BankInv Kort and BankInvest Value

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

The idea behind BankInv Kort HY and BankInvest Value Globale 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.