Correlation Between DSV Panalpina and BankInvest Select

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

By analyzing existing cross correlation between DSV Panalpina AS and BankInvest Select Small, you can compare the effects of market volatilities on DSV Panalpina and BankInvest Select 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 DSV Panalpina with a short position of BankInvest Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and BankInvest Select.

Diversification Opportunities for DSV Panalpina and BankInvest Select

-0.12

Correlation Coefficient

DSV Panalpina  BankInvest Select

Good diversification

The 3 months correlation between DSV and BankInvest is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and BankInvest Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Select Small and DSV Panalpina 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 DSV Panalpina AS are associated (or correlated) with BankInvest Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Select Small has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and BankInvest Select go up and down completely randomly.

Pair Corralation between DSV Panalpina and BankInvest Select

Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 0.91 times more return on investment than BankInvest Select. However, DSV Panalpina AS is 1.09 times less risky than BankInvest Select. It trades about -0.1 of its potential returns per unit of risk. BankInvest Select Small is currently generating about -0.11 per unit of risk. If you would invest  153,675  in DSV Panalpina AS on December 26, 2024 and sell it today you would lose (14,125) from holding DSV Panalpina AS or give up 9.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	72.13%
Values	Daily Returns

DSV Panalpina AS  vs.  BankInvest Select Small

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

BankInvest Select Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankInvest Select Small has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with DSV Panalpina and BankInvest Select

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

The idea behind DSV Panalpina AS and BankInvest Select Small 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.