Correlation Between Monsenso and Danske Invest

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

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

Diversification Opportunities for Monsenso and Danske Invest

-0.52

Correlation Coefficient

Monsenso  Danske Invest

Excellent diversification

The 3 months correlation between Monsenso and Danske is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Monsenso AS and Danske Invest Mix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest Mix and Monsenso 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 Monsenso AS are associated (or correlated) with Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest Mix has no effect on the direction of Monsenso i.e., Monsenso and Danske Invest go up and down completely randomly.

Pair Corralation between Monsenso and Danske Invest

Assuming the 90 days trading horizon Monsenso AS is expected to generate 47.33 times more return on investment than Danske Invest. However, Monsenso is 47.33 times more volatile than Danske Invest Mix. It trades about 0.03 of its potential returns per unit of risk. Danske Invest Mix is currently generating about 0.13 per unit of risk. If you would invest  47.00  in Monsenso AS on October 23, 2024 and sell it today you would lose (11.00) from holding Monsenso AS or give up 23.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Monsenso AS  vs.  Danske Invest Mix

Monsenso AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monsenso AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Danske Invest Mix

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Monsenso and Danske Invest

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

The idea behind Monsenso AS and Danske Invest Mix 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.