Correlation Between Nykredit Invest and BankInv Kort

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

By analyzing existing cross correlation between Nykredit Invest Korte and BankInv Kort HY, you can compare the effects of market volatilities on Nykredit Invest and BankInv Kort 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 BankInv Kort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nykredit Invest and BankInv Kort.

Diversification Opportunities for Nykredit Invest and BankInv Kort

0.31

Correlation Coefficient

Nykredit Invest  BankInv Kort

Weak diversification

The 3 months correlation between Nykredit and BankInv is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nykredit Invest Korte and BankInv Kort HY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInv Kort HY 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 Korte are associated (or correlated) with BankInv Kort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInv Kort HY has no effect on the direction of Nykredit Invest i.e., Nykredit Invest and BankInv Kort go up and down completely randomly.

Pair Corralation between Nykredit Invest and BankInv Kort

Assuming the 90 days trading horizon Nykredit Invest is expected to generate 1.54 times less return on investment than BankInv Kort. But when comparing it to its historical volatility, Nykredit Invest Korte is 1.11 times less risky than BankInv Kort. It trades about 0.06 of its potential returns per unit of risk. BankInv Kort HY is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9,994  in BankInv Kort HY on October 11, 2024 and sell it today you would earn a total of  341.00  from holding BankInv Kort HY or generate 3.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	39.02%
Values	Daily Returns

Nykredit Invest Korte  vs.  BankInv Kort HY

Nykredit Invest Korte

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nykredit Invest Korte are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Nykredit Invest is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

BankInv Kort HY

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BankInv Kort HY are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, BankInv Kort is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nykredit Invest and BankInv Kort

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

The idea behind Nykredit Invest Korte and BankInv Kort HY 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.