Correlation Between BankInvest Virksomhedsoblig and BankInvest Emerging

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

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

Diversification Opportunities for BankInvest Virksomhedsoblig and BankInvest Emerging

0.23

Correlation Coefficient

BankInvest Virksomhedsoblig  BankInvest Emerging

Modest diversification

The 3 months correlation between BankInvest and BankInvest is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Virksomhedsobliga and BankInvest Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Emerging and BankInvest Virksomhedsoblig 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 Virksomhedsobligationer are associated (or correlated) with BankInvest Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Emerging has no effect on the direction of BankInvest Virksomhedsoblig i.e., BankInvest Virksomhedsoblig and BankInvest Emerging go up and down completely randomly.

Pair Corralation between BankInvest Virksomhedsoblig and BankInvest Emerging

Assuming the 90 days trading horizon BankInvest Virksomhedsobligationer is expected to under-perform the BankInvest Emerging. But the fund apears to be less risky and, when comparing its historical volatility, BankInvest Virksomhedsobligationer is 2.34 times less risky than BankInvest Emerging. The fund trades about -0.02 of its potential returns per unit of risk. The BankInvest Emerging is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  10,180  in BankInvest Emerging on October 25, 2024 and sell it today you would earn a total of  60.00  from holding BankInvest Emerging or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.22%
Values	Daily Returns

BankInvest Virksomhedsobliga  vs.  BankInvest Emerging

BankInvest Virksomhedsoblig

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BankInvest Virksomhedsobligationer has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable technical and fundamental indicators, BankInvest Virksomhedsoblig is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

BankInvest Emerging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Emerging are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, BankInvest Emerging is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BankInvest Virksomhedsoblig and BankInvest Emerging

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

The idea behind BankInvest Virksomhedsobligationer and BankInvest Emerging 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..