Correlation Between Moens Bank and BankInvest Value

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

By analyzing existing cross correlation between Moens Bank AS and BankInvest Value Globale, you can compare the effects of market volatilities on Moens Bank and BankInvest Value 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 Moens Bank with a short position of BankInvest Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moens Bank and BankInvest Value.

Diversification Opportunities for Moens Bank and BankInvest Value

-0.18

Correlation Coefficient

Moens Bank  BankInvest Value

Good diversification

The 3 months correlation between Moens and BankInvest is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Moens Bank AS and BankInvest Value Globale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Value Globale and Moens Bank 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 Moens Bank AS are associated (or correlated) with BankInvest Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Value Globale has no effect on the direction of Moens Bank i.e., Moens Bank and BankInvest Value go up and down completely randomly.

Pair Corralation between Moens Bank and BankInvest Value

Assuming the 90 days trading horizon Moens Bank AS is expected to generate 2.03 times more return on investment than BankInvest Value. However, Moens Bank is 2.03 times more volatile than BankInvest Value Globale. It trades about 0.07 of its potential returns per unit of risk. BankInvest Value Globale is currently generating about 0.09 per unit of risk. If you would invest  22,400  in Moens Bank AS on October 22, 2024 and sell it today you would earn a total of  1,400  from holding Moens Bank AS or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Moens Bank AS  vs.  BankInvest Value Globale

Moens Bank AS

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Moens Bank AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Moens Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BankInvest Value Globale

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Value Globale are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BankInvest Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Moens Bank and BankInvest Value

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

The idea behind Moens Bank AS and BankInvest Value Globale 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.

Check out your portfolio center.

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.