Correlation Between Bankinvest and Bankinvest DKK100

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

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

Diversification Opportunities for Bankinvest and Bankinvest DKK100

0.0

Correlation Coefficient

Bankinvest  Bankinvest DKK100

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

Pair Corralation between Bankinvest and Bankinvest DKK100

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	100.0%
Values	Daily Returns

Bankinvest BI  vs.  Bankinvest DKK100

Bankinvest BI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bankinvest BI has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable forward-looking signals, Bankinvest is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with Bankinvest and Bankinvest DKK100

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

The idea behind Bankinvest BI and Bankinvest DKK100 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.