Correlation Between Xact Kapitalforvaltni and DKIDMOBL

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

By analyzing existing cross correlation between Xact Kapitalforvaltning and Investeringsforeningen Danske Invest, you can compare the effects of market volatilities on Xact Kapitalforvaltni and DKIDMOBL 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 Xact Kapitalforvaltni with a short position of DKIDMOBL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xact Kapitalforvaltni and DKIDMOBL.

Diversification Opportunities for Xact Kapitalforvaltni and DKIDMOBL

-0.57

Correlation Coefficient

Xact Kapitalforvaltni  DKIDMOBL

Excellent diversification

The 3 months correlation between Xact and DKIDMOBL is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Xact Kapitalforvaltning and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen and Xact Kapitalforvaltni 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 Xact Kapitalforvaltning are associated (or correlated) with DKIDMOBL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Xact Kapitalforvaltni i.e., Xact Kapitalforvaltni and DKIDMOBL go up and down completely randomly.

Pair Corralation between Xact Kapitalforvaltni and DKIDMOBL

Assuming the 90 days trading horizon Xact Kapitalforvaltning is expected to under-perform the DKIDMOBL. In addition to that, Xact Kapitalforvaltni is 10.04 times more volatile than Investeringsforeningen Danske Invest. It trades about -0.17 of its total potential returns per unit of risk. Investeringsforeningen Danske Invest is currently generating about -0.2 per unit of volatility. If you would invest  8,501  in Investeringsforeningen Danske Invest on October 9, 2024 and sell it today you would lose (35.00) from holding Investeringsforeningen Danske Invest or give up 0.41% of portfolio value over 90 days.

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

Xact Kapitalforvaltning  vs.  Investeringsforeningen Danske

Xact Kapitalforvaltning

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xact Kapitalforvaltning has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Investeringsforeningen

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, DKIDMOBL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xact Kapitalforvaltni and DKIDMOBL

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

The idea behind Xact Kapitalforvaltning and Investeringsforeningen Danske 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.