Correlation Between DKIDKA and DKINYM

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

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

Diversification Opportunities for DKIDKA and DKINYM

-0.21

Correlation Coefficient

DKIDKA  DKINYM

Very good diversification

The 3 months correlation between DKIDKA and DKINYM is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen and DKIDKA 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 Investeringsforeningen Danske Invest are associated (or correlated) with DKINYM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of DKIDKA i.e., DKIDKA and DKINYM go up and down completely randomly.

Pair Corralation between DKIDKA and DKINYM

Assuming the 90 days trading horizon Investeringsforeningen Danske Invest is expected to under-perform the DKINYM. But the fund apears to be less risky and, when comparing its historical volatility, Investeringsforeningen Danske Invest is 1.01 times less risky than DKINYM. The fund trades about -0.05 of its potential returns per unit of risk. The Investeringsforeningen Danske Invest is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  18,879  in Investeringsforeningen Danske Invest on September 5, 2024 and sell it today you would earn a total of  1,351  from holding Investeringsforeningen Danske Invest or generate 7.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Investeringsforeningen Danske   vs.  Investeringsforeningen Danske

Investeringsforeningen

Risk-Adjusted Performance

0 of 100

Very Weak

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

Investeringsforeningen

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak forward indicators, DKINYM may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with DKIDKA and DKINYM

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

The idea behind Investeringsforeningen Danske Invest and Investeringsforeningen Danske Invest 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.