Correlation Between Nykredit Invest and Alm Brand

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

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

Diversification Opportunities for Nykredit Invest and Alm Brand

-0.44

Correlation Coefficient

Nykredit Invest  Alm Brand

Very good diversification

The 3 months correlation between Nykredit and Alm is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nykredit Invest Danske and Alm Brand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alm Brand and Nykredit 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 Nykredit Invest Danske are associated (or correlated) with Alm Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alm Brand has no effect on the direction of Nykredit Invest i.e., Nykredit Invest and Alm Brand go up and down completely randomly.

Pair Corralation between Nykredit Invest and Alm Brand

Assuming the 90 days trading horizon Nykredit Invest Danske is expected to under-perform the Alm Brand. But the stock apears to be less risky and, when comparing its historical volatility, Nykredit Invest Danske is 1.41 times less risky than Alm Brand. The stock trades about -0.09 of its potential returns per unit of risk. The Alm Brand is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,415  in Alm Brand on September 23, 2024 and sell it today you would lose (53.00) from holding Alm Brand or give up 3.75% of portfolio value over 90 days.

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

Nykredit Invest Danske  vs.  Alm Brand

Nykredit Invest Danske

Risk-Adjusted Performance

0 of 100

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 latest weak 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.

Alm Brand

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alm Brand are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Alm Brand may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nykredit Invest and Alm Brand

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

The idea behind Nykredit Invest Danske and Alm Brand 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.