Correlation Between BankInvest Optima and BankInvest Lange

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

By analyzing existing cross correlation between BankInvest Optima 10 and BankInvest Lange Danske, you can compare the effects of market volatilities on BankInvest Optima and BankInvest Lange 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 Optima with a short position of BankInvest Lange. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Optima and BankInvest Lange.

Diversification Opportunities for BankInvest Optima and BankInvest Lange

0.0

Correlation Coefficient

BankInvest Optima  BankInvest Lange

Pay attention - limited upside

The 3 months correlation between BankInvest and BankInvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Optima 10 and BankInvest Lange Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Lange Danske and BankInvest Optima 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 Optima 10 are associated (or correlated) with BankInvest Lange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Lange Danske has no effect on the direction of BankInvest Optima i.e., BankInvest Optima and BankInvest Lange go up and down completely randomly.

Pair Corralation between BankInvest Optima and BankInvest Lange

If you would invest  8,192  in BankInvest Lange Danske on October 10, 2024 and sell it today you would earn a total of  692.00  from holding BankInvest Lange Danske or generate 8.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BankInvest Optima 10  vs.  BankInvest Lange Danske

BankInvest Optima

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BankInvest Optima 10 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, BankInvest Optima is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BankInvest Lange Danske

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Lange Danske are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, BankInvest Lange 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 Optima and BankInvest Lange

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

The idea behind BankInvest Optima 10 and BankInvest Lange Danske 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.