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 UCITS 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

-0.13

Correlation Coefficient

Maj Invest  Xact Kapitalforvaltni

Good diversification

The 3 months correlation between Maj and Xact is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Maj Invest UCITS 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 UCITS 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 UCITS is expected to generate 1.19 times more return on investment than Xact Kapitalforvaltni. However, Maj Invest is 1.19 times more volatile than Xact Kapitalforvaltning. It trades about 0.07 of its potential returns per unit of risk. Xact Kapitalforvaltning is currently generating about -0.14 per unit of risk. If you would invest  11,260  in Maj Invest UCITS on October 25, 2024 and sell it today you would earn a total of  505.00  from holding Maj Invest UCITS or generate 4.48% return on investment over 90 days.

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

Maj Invest UCITS  vs.  Xact Kapitalforvaltning

Maj Invest UCITS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maj Invest UCITS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking indicators, Maj Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Xact Kapitalforvaltning

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xact Kapitalforvaltning has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF 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 UCITS 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.