Correlation Between Fundamental Invest and Nykredit Invest

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

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

Diversification Opportunities for Fundamental Invest and Nykredit Invest

-0.65

Correlation Coefficient

Fundamental Invest  Nykredit Invest

Excellent diversification

The 3 months correlation between Fundamental and Nykredit is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Invest Stock and Nykredit Invest Korte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Korte and Fundamental Invest 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 Fundamental Invest Stock are associated (or correlated) with Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Korte has no effect on the direction of Fundamental Invest i.e., Fundamental Invest and Nykredit Invest go up and down completely randomly.

Pair Corralation between Fundamental Invest and Nykredit Invest

Assuming the 90 days trading horizon Fundamental Invest Stock is expected to under-perform the Nykredit Invest. In addition to that, Fundamental Invest is 12.36 times more volatile than Nykredit Invest Korte. It trades about -0.09 of its total potential returns per unit of risk. Nykredit Invest Korte is currently generating about 0.12 per unit of volatility. If you would invest  9,877  in Nykredit Invest Korte on October 23, 2024 and sell it today you would earn a total of  52.00  from holding Nykredit Invest Korte or generate 0.53% return on investment over 90 days.

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

Fundamental Invest Stock  vs.  Nykredit Invest Korte

Fundamental Invest Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundamental Invest Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Fundamental Invest is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Nykredit Invest Korte

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nykredit Invest Korte are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Nykredit Invest is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fundamental Invest and Nykredit Invest

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

The idea behind Fundamental Invest Stock and Nykredit Invest Korte 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.