Correlation Between Pandora AS and Brd Klee

Can any of the company-specific risk be diversified away by investing in both Pandora AS and Brd Klee 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 Pandora AS and Brd Klee into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Pandora AS and Brd Klee

-0.34

Correlation Coefficient

Pandora AS  Brd Klee

Very good diversification

The 3 months correlation between Pandora and Brd is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS and Brd Klee AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brd Klee AS and Pandora AS 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 Pandora AS are associated (or correlated) with Brd Klee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brd Klee AS has no effect on the direction of Pandora AS i.e., Pandora AS and Brd Klee go up and down completely randomly.

Pair Corralation between Pandora AS and Brd Klee

Assuming the 90 days trading horizon Pandora AS is expected to generate 1.1 times more return on investment than Brd Klee. However, Pandora AS is 1.1 times more volatile than Brd Klee AS. It trades about 0.07 of its potential returns per unit of risk. Brd Klee AS is currently generating about -0.05 per unit of risk. If you would invest  119,050  in Pandora AS on September 15, 2024 and sell it today you would earn a total of  8,450  from holding Pandora AS or generate 7.1% return on investment over 90 days.

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

Pandora AS  vs.  Brd Klee AS

Pandora AS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pandora AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental indicators, Pandora AS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Brd Klee AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brd Klee AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Brd Klee is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pandora AS and Brd Klee

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

The idea behind Pandora AS and Brd Klee 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.