Correlation Between BankInv Kort and Moens Bank

Can any of the company-specific risk be diversified away by investing in both BankInv Kort and Moens 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 BankInv Kort and Moens Bank 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 Moens Bank AS, you can compare the effects of market volatilities on BankInv Kort and Moens 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 BankInv Kort with a short position of Moens Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInv Kort and Moens Bank.

Diversification Opportunities for BankInv Kort and Moens Bank

0.34

Correlation Coefficient

BankInv Kort  Moens Bank

Weak diversification

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

Pair Corralation between BankInv Kort and Moens Bank

Assuming the 90 days trading horizon BankInv Kort is expected to generate 11.92 times less return on investment than Moens Bank. But when comparing it to its historical volatility, BankInv Kort HY is 8.26 times less risky than Moens Bank. It trades about 0.05 of its potential returns per unit of risk. Moens Bank AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  22,400  in Moens Bank AS on October 25, 2024 and sell it today you would earn a total of  1,200  from holding Moens Bank AS or generate 5.36% return on investment over 90 days.

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

BankInv Kort HY  vs.  Moens Bank AS

BankInv Kort HY

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BankInv Kort HY are ranked lower than 3 (%) 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.

Moens Bank AS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moens Bank AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Moens Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BankInv Kort and Moens Bank

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

The idea behind BankInv Kort HY and Moens 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 CEOs Directory module to screen CEOs from public companies around the world.