Correlation Between Nilfisk Holding and Nykredit Invest

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

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

Diversification Opportunities for Nilfisk Holding and Nykredit Invest

0.0

Correlation Coefficient

Nilfisk Holding  Nykredit Invest

Pay attention - limited upside

The 3 months correlation between Nilfisk and Nykredit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nilfisk Holding AS and Nykredit Invest Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Danske and Nilfisk Holding 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 Nilfisk Holding AS are associated (or correlated) with Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Danske has no effect on the direction of Nilfisk Holding i.e., Nilfisk Holding and Nykredit Invest go up and down completely randomly.

Pair Corralation between Nilfisk Holding and Nykredit Invest

Assuming the 90 days trading horizon Nilfisk Holding AS is expected to under-perform the Nykredit Invest. In addition to that, Nilfisk Holding is 1.73 times more volatile than Nykredit Invest Danske. It trades about -0.07 of its total potential returns per unit of risk. Nykredit Invest Danske is currently generating about -0.09 per unit of volatility. If you would invest  19,381  in Nykredit Invest Danske on December 24, 2024 and sell it today you would lose (1,181) from holding Nykredit Invest Danske or give up 6.09% of portfolio value over 90 days.

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

Nilfisk Holding AS  vs.  Nykredit Invest Danske

Nilfisk Holding AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nilfisk Holding AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Nykredit Invest Danske

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Nilfisk Holding and Nykredit Invest

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

The idea behind Nilfisk Holding AS and Nykredit Invest Danske 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.