Correlation Between Dampskibsselskabet and Per Aarsleff

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

By analyzing existing cross correlation between Dampskibsselskabet Norden AS and Per Aarsleff Holding, you can compare the effects of market volatilities on Dampskibsselskabet and Per Aarsleff 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 Dampskibsselskabet with a short position of Per Aarsleff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dampskibsselskabet and Per Aarsleff.

Diversification Opportunities for Dampskibsselskabet and Per Aarsleff

-0.49

Correlation Coefficient

Dampskibsselskabet  Per Aarsleff

Very good diversification

The 3 months correlation between Dampskibsselskabet and Per is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dampskibsselskabet Norden AS and Per Aarsleff Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Per Aarsleff Holding and Dampskibsselskabet 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 Dampskibsselskabet Norden AS are associated (or correlated) with Per Aarsleff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Per Aarsleff Holding has no effect on the direction of Dampskibsselskabet i.e., Dampskibsselskabet and Per Aarsleff go up and down completely randomly.

Pair Corralation between Dampskibsselskabet and Per Aarsleff

Assuming the 90 days trading horizon Dampskibsselskabet Norden AS is expected to under-perform the Per Aarsleff. In addition to that, Dampskibsselskabet is 1.03 times more volatile than Per Aarsleff Holding. It trades about -0.09 of its total potential returns per unit of risk. Per Aarsleff Holding is currently generating about 0.03 per unit of volatility. If you would invest  48,864  in Per Aarsleff Holding on December 27, 2024 and sell it today you would earn a total of  1,636  from holding Per Aarsleff Holding or generate 3.35% return on investment over 90 days.

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

Dampskibsselskabet Norden AS  vs.  Per Aarsleff Holding

Dampskibsselskabet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dampskibsselskabet Norden AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Per Aarsleff Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Per Aarsleff Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Per Aarsleff is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dampskibsselskabet and Per Aarsleff

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

The idea behind Dampskibsselskabet Norden AS and Per Aarsleff Holding 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.