Correlation Between Pandora AS and Silkeborg

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

By analyzing existing cross correlation between Pandora AS and Silkeborg IF Invest, you can compare the effects of market volatilities on Pandora AS and Silkeborg 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 Silkeborg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora AS and Silkeborg.

Diversification Opportunities for Pandora AS and Silkeborg

0.72

Correlation Coefficient

Pandora AS  Silkeborg

Poor diversification

The 3 months correlation between Pandora and Silkeborg is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS and Silkeborg IF Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silkeborg IF Invest 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 Silkeborg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silkeborg IF Invest has no effect on the direction of Pandora AS i.e., Pandora AS and Silkeborg go up and down completely randomly.

Pair Corralation between Pandora AS and Silkeborg

Assuming the 90 days trading horizon Pandora AS is expected to generate 0.43 times more return on investment than Silkeborg. However, Pandora AS is 2.34 times less risky than Silkeborg. It trades about 0.27 of its potential returns per unit of risk. Silkeborg IF Invest is currently generating about 0.11 per unit of risk. If you would invest  105,950  in Pandora AS on October 9, 2024 and sell it today you would earn a total of  25,400  from holding Pandora AS or generate 23.97% return on investment over 90 days.

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

Pandora AS  vs.  Silkeborg IF Invest

Pandora AS

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pandora AS are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Pandora AS sustained solid returns over the last few months and may actually be approaching a breakup point.

Silkeborg IF Invest

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silkeborg IF Invest are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Silkeborg displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pandora AS and Silkeborg

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

The idea behind Pandora AS and Silkeborg IF Invest 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.