Correlation Between DSV Panalpina and Danske Invest

Can any of the company-specific risk be diversified away by investing in both DSV Panalpina and Danske Invest 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 Danske Invest 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 Danske Invest , you can compare the effects of market volatilities on DSV Panalpina and Danske Invest 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 Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and Danske Invest.

Diversification Opportunities for DSV Panalpina and Danske Invest

0.75

Correlation Coefficient

DSV Panalpina  Danske Invest

Poor diversification

The 3 months correlation between DSV and Danske is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Danske Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest 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 Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Danske Invest go up and down completely randomly.

Pair Corralation between DSV Panalpina and Danske Invest

Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 27.89 times more return on investment than Danske Invest. However, DSV Panalpina is 27.89 times more volatile than Danske Invest . It trades about 0.18 of its potential returns per unit of risk. Danske Invest is currently generating about 0.4 per unit of risk. If you would invest  122,500  in DSV Panalpina AS on September 1, 2024 and sell it today you would earn a total of  28,200  from holding DSV Panalpina AS or generate 23.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

DSV Panalpina AS  vs.  Danske Invest

DSV Panalpina AS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DSV Panalpina displayed solid returns over the last few months and may actually be approaching a breakup point.

Danske Invest

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Danske Invest are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Danske Invest is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DSV Panalpina and Danske Invest

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

The idea behind DSV Panalpina AS and 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.