Correlation Between BankIn Bredygt and Formuepleje Limittellus

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

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

Diversification Opportunities for BankIn Bredygt and Formuepleje Limittellus

-0.17

Correlation Coefficient

BankIn Bredygt  Formuepleje Limittellus

Good diversification

The 3 months correlation between BankIn and Formuepleje is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding BankIn Bredygt Klimaakt and Formuepleje Limittellus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formuepleje Limittellus and BankIn Bredygt 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 BankIn Bredygt Klimaakt are associated (or correlated) with Formuepleje Limittellus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formuepleje Limittellus has no effect on the direction of BankIn Bredygt i.e., BankIn Bredygt and Formuepleje Limittellus go up and down completely randomly.

Pair Corralation between BankIn Bredygt and Formuepleje Limittellus

Assuming the 90 days trading horizon BankIn Bredygt Klimaakt is expected to under-perform the Formuepleje Limittellus. In addition to that, BankIn Bredygt is 1.29 times more volatile than Formuepleje Limittellus. It trades about -0.09 of its total potential returns per unit of risk. Formuepleje Limittellus is currently generating about -0.02 per unit of volatility. If you would invest  28,768  in Formuepleje Limittellus on December 2, 2024 and sell it today you would lose (198.00) from holding Formuepleje Limittellus or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.79%
Values	Daily Returns

BankIn Bredygt Klimaakt  vs.  Formuepleje Limittellus

BankIn Bredygt Klimaakt

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankIn Bredygt Klimaakt 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 forward 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.

Formuepleje Limittellus

Risk-Adjusted Performance

Very Weak

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

Pair Trading with BankIn Bredygt and Formuepleje Limittellus

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

The idea behind BankIn Bredygt Klimaakt and Formuepleje Limittellus 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.