Correlation Between BankInvest Value and DI Global

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

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

Diversification Opportunities for BankInvest Value and DI Global

0.78

Correlation Coefficient

BankInvest Value  DI Global

Poor diversification

The 3 months correlation between BankInvest and DKIGSFUT is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Value Globale and DI Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DI Global Sustainable and BankInvest Value 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 Value Globale are associated (or correlated) with DI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DI Global Sustainable has no effect on the direction of BankInvest Value i.e., BankInvest Value and DI Global go up and down completely randomly.

Pair Corralation between BankInvest Value and DI Global

Assuming the 90 days trading horizon BankInvest Value is expected to generate 1.23 times less return on investment than DI Global. But when comparing it to its historical volatility, BankInvest Value Globale is 1.01 times less risky than DI Global. It trades about 0.1 of its potential returns per unit of risk. DI Global Sustainable is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  37,750  in DI Global Sustainable on October 24, 2024 and sell it today you would earn a total of  2,120  from holding DI Global Sustainable or generate 5.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	91.67%
Values	Daily Returns

BankInvest Value Globale  vs.  DI Global Sustainable

BankInvest Value Globale

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Value Globale are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BankInvest Value is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

DI Global Sustainable

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DI Global Sustainable are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, DI Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BankInvest Value and DI Global

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

The idea behind BankInvest Value Globale and DI Global Sustainable 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.