Correlation Between Nykredit Invest and BankInvest Optima

Can any of the company-specific risk be diversified away by investing in both Nykredit Invest and BankInvest Optima 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 BankInvest Optima 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 BankInvest Optima 30, you can compare the effects of market volatilities on Nykredit Invest and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nykredit Invest and BankInvest Optima.

Diversification Opportunities for Nykredit Invest and BankInvest Optima

0.95

Correlation Coefficient

Nykredit Invest  BankInvest Optima

Almost no diversification

The 3 months correlation between Nykredit and BankInvest is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Nykredit Invest Korte and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Nykredit Invest i.e., Nykredit Invest and BankInvest Optima go up and down completely randomly.

Pair Corralation between Nykredit Invest and BankInvest Optima

Assuming the 90 days trading horizon Nykredit Invest is expected to generate 3.95 times less return on investment than BankInvest Optima. But when comparing it to its historical volatility, Nykredit Invest Korte is 6.26 times less risky than BankInvest Optima. It trades about 0.22 of its potential returns per unit of risk. BankInvest Optima 30 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  10,830  in BankInvest Optima 30 on October 8, 2024 and sell it today you would earn a total of  380.00  from holding BankInvest Optima 30 or generate 3.51% return on investment over 90 days.

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

Nykredit Invest Korte  vs.  BankInvest Optima 30

Nykredit Invest Korte

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nykredit Invest Korte are ranked lower than 17 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

BankInvest Optima

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Optima 30 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, BankInvest Optima is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nykredit Invest and BankInvest Optima

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

The idea behind Nykredit Invest Korte and BankInvest Optima 30 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .