Correlation Between Per Aarsleff and Copenhagen Airports

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

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

Diversification Opportunities for Per Aarsleff and Copenhagen Airports

0.83

Correlation Coefficient

Per Aarsleff  Copenhagen Airports

Very poor diversification

The 3 months correlation between Per and Copenhagen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Per Aarsleff Holding and Copenhagen Airports AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copenhagen Airports and Per Aarsleff 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 Per Aarsleff Holding are associated (or correlated) with Copenhagen Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copenhagen Airports has no effect on the direction of Per Aarsleff i.e., Per Aarsleff and Copenhagen Airports go up and down completely randomly.

Pair Corralation between Per Aarsleff and Copenhagen Airports

Assuming the 90 days trading horizon Per Aarsleff is expected to generate 4.45 times less return on investment than Copenhagen Airports. But when comparing it to its historical volatility, Per Aarsleff Holding is 4.87 times less risky than Copenhagen Airports. It trades about 0.13 of its potential returns per unit of risk. Copenhagen Airports AS is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  410,000  in Copenhagen Airports AS on October 22, 2024 and sell it today you would earn a total of  226,000  from holding Copenhagen Airports AS or generate 55.12% return on investment over 90 days.

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

Per Aarsleff Holding  vs.  Copenhagen Airports AS

Per Aarsleff Holding

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Per Aarsleff Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Per Aarsleff sustained solid returns over the last few months and may actually be approaching a breakup point.

Copenhagen Airports

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Copenhagen Airports AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Copenhagen Airports displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Per Aarsleff and Copenhagen Airports

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

The idea behind Per Aarsleff Holding and Copenhagen Airports AS 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.