Correlation Between BankInvest Value and Moens Bank

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

Diversification Opportunities for BankInvest Value and Moens Bank

-0.43

Correlation Coefficient

BankInvest Value  Moens Bank

Very good diversification

The 3 months correlation between BankInvest and Moens is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Value Globale 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 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 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 BankInvest Value i.e., BankInvest Value and Moens Bank go up and down completely randomly.

Pair Corralation between BankInvest Value and Moens Bank

Assuming the 90 days trading horizon BankInvest Value Globale is expected to under-perform the Moens Bank. But the stock apears to be less risky and, when comparing its historical volatility, BankInvest Value Globale is 2.68 times less risky than Moens Bank. The stock trades about -0.07 of its potential returns per unit of risk. The Moens Bank AS is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  22,000  in Moens Bank AS on October 11, 2024 and sell it today you would earn a total of  1,800  from holding Moens Bank AS or generate 8.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.89%
Values	Daily Returns

BankInvest Value Globale  vs.  Moens Bank AS

BankInvest Value Globale

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Value Globale are ranked lower than 6 (%) 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.

Moens Bank AS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Moens Bank AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Moens Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BankInvest Value and Moens Bank

The main advantage of trading using opposite BankInvest Value and Moens Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankInvest Value 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 BankInvest Value Globale 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.