Correlation Between DKINYM and PF Atlantic

Can any of the company-specific risk be diversified away by investing in both DKINYM and PF Atlantic 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 DKINYM and PF Atlantic 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 PF Atlantic Petroleum, you can compare the effects of market volatilities on DKINYM and PF Atlantic 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 DKINYM with a short position of PF Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKINYM and PF Atlantic.

Diversification Opportunities for DKINYM and PF Atlantic

0.32

Correlation Coefficient

DKINYM  PF Atlantic

Weak diversification

The 3 months correlation between DKINYM and ATLA-DKK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and PF Atlantic Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PF Atlantic Petroleum and DKINYM 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 PF Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PF Atlantic Petroleum has no effect on the direction of DKINYM i.e., DKINYM and PF Atlantic go up and down completely randomly.

Pair Corralation between DKINYM and PF Atlantic

Assuming the 90 days trading horizon Investeringsforeningen Danske Invest is expected to under-perform the PF Atlantic. But the fund apears to be less risky and, when comparing its historical volatility, Investeringsforeningen Danske Invest is 10.79 times less risky than PF Atlantic. The fund trades about -0.09 of its potential returns per unit of risk. The PF Atlantic Petroleum is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  188.00  in PF Atlantic Petroleum on December 10, 2024 and sell it today you would earn a total of  16.00  from holding PF Atlantic Petroleum or generate 8.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Investeringsforeningen Danske   vs.  PF Atlantic Petroleum

Investeringsforeningen

Risk-Adjusted Performance

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, DKINYM is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

PF Atlantic Petroleum

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PF Atlantic Petroleum are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PF Atlantic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DKINYM and PF Atlantic

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

The idea behind Investeringsforeningen Danske Invest and PF Atlantic Petroleum 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.