Correlation Between Bankinvest DKK100 and Bankinvest Danske

Can any of the company-specific risk be diversified away by investing in both Bankinvest DKK100 and Bankinvest Danske 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 DKK100 and Bankinvest Danske into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bankinvest DKK100 and Bankinvest Danske, you can compare the effects of market volatilities on Bankinvest DKK100 and Bankinvest Danske 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 DKK100 with a short position of Bankinvest Danske. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinvest DKK100 and Bankinvest Danske.

Diversification Opportunities for Bankinvest DKK100 and Bankinvest Danske

0.0

Correlation Coefficient

Bankinvest DKK100  Bankinvest Danske

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 DKK100 and Bankinvest Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinvest Danske and Bankinvest DKK100 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 DKK100 are associated (or correlated) with Bankinvest Danske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinvest Danske has no effect on the direction of Bankinvest DKK100 i.e., Bankinvest DKK100 and Bankinvest Danske go up and down completely randomly.

Pair Corralation between Bankinvest DKK100 and Bankinvest Danske

If you would invest (100.00) in Bankinvest DKK100 on September 12, 2024 and sell it today you would earn a total of  100.00  from holding Bankinvest DKK100 or generate -100.0% return on investment over 90 days.

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

Bankinvest DKK100  vs.  Bankinvest Danske

Bankinvest DKK100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bankinvest DKK100 has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent forward-looking signals, Bankinvest DKK100 is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Bankinvest Danske

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bankinvest Danske has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Bankinvest Danske 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 DKK100 and Bankinvest Danske

The main advantage of trading using opposite Bankinvest DKK100 and Bankinvest Danske positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinvest DKK100 position performs unexpectedly, Bankinvest Danske 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 Danske will offset losses from the drop in Bankinvest Danske's long position.

The idea behind Bankinvest DKK100 and Bankinvest 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.