Correlation Between Danske Invest and Sparinvest INDEX

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

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

Diversification Opportunities for Danske Invest and Sparinvest INDEX

0.0

Correlation Coefficient

Danske Invest  Sparinvest INDEX

Pay attention - limited upside

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

Pair Corralation between Danske Invest and Sparinvest INDEX

If you would invest (100.00) in Sparinvest INDEX Globale on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Sparinvest INDEX Globale 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

Danske Invest Danmark  vs.  Sparinvest INDEX Globale

Danske Invest Danmark

Risk-Adjusted Performance

Very Weak

Over the last 90 days Danske Invest Danmark has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Sparinvest INDEX Globale

Risk-Adjusted Performance

Modest

Over the last 90 days Sparinvest INDEX Globale has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Sparinvest INDEX is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Danske Invest and Sparinvest INDEX

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

The idea behind Danske Invest Danmark and Sparinvest INDEX Globale 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.