Correlation Between Maj Invest and Xact Kapitalforvaltni

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

By analyzing existing cross correlation between Maj Invest ETF and Xact Kapitalforvaltning, you can compare the effects of market volatilities on Maj Invest and Xact Kapitalforvaltni 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 Maj Invest with a short position of Xact Kapitalforvaltni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maj Invest and Xact Kapitalforvaltni.

Diversification Opportunities for Maj Invest and Xact Kapitalforvaltni

0.14

Correlation Coefficient

Maj Invest  Xact Kapitalforvaltni

Average diversification

The 3 months correlation between Maj and Xact is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Maj Invest ETF and Xact Kapitalforvaltning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xact Kapitalforvaltning and Maj 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 Maj Invest ETF are associated (or correlated) with Xact Kapitalforvaltni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xact Kapitalforvaltning has no effect on the direction of Maj Invest i.e., Maj Invest and Xact Kapitalforvaltni go up and down completely randomly.

Pair Corralation between Maj Invest and Xact Kapitalforvaltni

Assuming the 90 days trading horizon Maj Invest ETF is expected to under-perform the Xact Kapitalforvaltni. In addition to that, Maj Invest is 1.74 times more volatile than Xact Kapitalforvaltning. It trades about -0.1 of its total potential returns per unit of risk. Xact Kapitalforvaltning is currently generating about -0.02 per unit of volatility. If you would invest  18,946  in Xact Kapitalforvaltning on December 22, 2024 and sell it today you would lose (262.00) from holding Xact Kapitalforvaltning or give up 1.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Maj Invest ETF  vs.  Xact Kapitalforvaltning

Maj Invest ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maj Invest ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Xact Kapitalforvaltning

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xact Kapitalforvaltning has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xact Kapitalforvaltni is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Maj Invest and Xact Kapitalforvaltni

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

The idea behind Maj Invest ETF and Xact Kapitalforvaltning 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.