Correlation Between Maj Invest and DKIEUHUAKLDKK

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

By analyzing existing cross correlation between Maj Invest and Investeringsforeningen Danske Invest, you can compare the effects of market volatilities on Maj Invest and DKIEUHUAKLDKK 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 DKIEUHUAKLDKK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maj Invest and DKIEUHUAKLDKK.

Diversification Opportunities for Maj Invest and DKIEUHUAKLDKK

0.74

Correlation Coefficient

Maj Invest  DKIEUHUAKLDKK

Poor diversification

The 3 months correlation between Maj and DKIEUHUAKLDKK is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Maj Invest and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen 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 are associated (or correlated) with DKIEUHUAKLDKK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Maj Invest i.e., Maj Invest and DKIEUHUAKLDKK go up and down completely randomly.

Pair Corralation between Maj Invest and DKIEUHUAKLDKK

Assuming the 90 days trading horizon Maj Invest is expected to under-perform the DKIEUHUAKLDKK. In addition to that, Maj Invest is 1.14 times more volatile than Investeringsforeningen Danske Invest. It trades about -0.04 of its total potential returns per unit of risk. Investeringsforeningen Danske Invest is currently generating about -0.05 per unit of volatility. If you would invest  22,002  in Investeringsforeningen Danske Invest on September 14, 2024 and sell it today you would lose (442.00) from holding Investeringsforeningen Danske Invest or give up 2.01% of portfolio value over 90 days.

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

Maj Invest   vs.  Investeringsforeningen Danske

Maj Invest

Risk-Adjusted Performance

0 of 100

Very Weak

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

Investeringsforeningen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investeringsforeningen Danske Invest has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable essential indicators, DKIEUHUAKLDKK is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Maj Invest and DKIEUHUAKLDKK

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

The idea behind Maj Invest and Investeringsforeningen 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.