Correlation Between BankInvest Value and Formuepleje Mix

Can any of the company-specific risk be diversified away by investing in both BankInvest Value and Formuepleje Mix 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 Formuepleje Mix 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 Formuepleje Mix Medium, you can compare the effects of market volatilities on BankInvest Value and Formuepleje Mix 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 Formuepleje Mix. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Value and Formuepleje Mix.

Diversification Opportunities for BankInvest Value and Formuepleje Mix

0.92

Correlation Coefficient

BankInvest Value  Formuepleje Mix

Almost no diversification

The 3 months correlation between BankInvest and Formuepleje is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Value Globale and Formuepleje Mix Medium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formuepleje Mix Medium 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 Formuepleje Mix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formuepleje Mix Medium has no effect on the direction of BankInvest Value i.e., BankInvest Value and Formuepleje Mix go up and down completely randomly.

Pair Corralation between BankInvest Value and Formuepleje Mix

Assuming the 90 days trading horizon BankInvest Value is expected to generate 1.13 times less return on investment than Formuepleje Mix. In addition to that, BankInvest Value is 1.57 times more volatile than Formuepleje Mix Medium. It trades about 0.04 of its total potential returns per unit of risk. Formuepleje Mix Medium is currently generating about 0.07 per unit of volatility. If you would invest  28,320  in Formuepleje Mix Medium on October 4, 2024 and sell it today you would earn a total of  1,180  from holding Formuepleje Mix Medium or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.06%
Values	Daily Returns

BankInvest Value Globale  vs.  Formuepleje Mix Medium

BankInvest Value Globale

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Value Globale are ranked lower than 4 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Formuepleje Mix Medium

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Formuepleje Mix Medium are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Formuepleje Mix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BankInvest Value and Formuepleje Mix

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

The idea behind BankInvest Value Globale and Formuepleje Mix Medium 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.