Correlation Between BankInv Kort and Danske Invest

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

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

Diversification Opportunities for BankInv Kort and Danske Invest

0.38

Correlation Coefficient

BankInv Kort  Danske Invest

Weak diversification

The 3 months correlation between BankInv and Danske is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BankInv Kort HY and Danske Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest and BankInv Kort 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 BankInv Kort HY are associated (or correlated) with Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest has no effect on the direction of BankInv Kort i.e., BankInv Kort and Danske Invest go up and down completely randomly.

Pair Corralation between BankInv Kort and Danske Invest

Assuming the 90 days trading horizon BankInv Kort HY is expected to generate 2.07 times more return on investment than Danske Invest. However, BankInv Kort is 2.07 times more volatile than Danske Invest . It trades about 0.09 of its potential returns per unit of risk. Danske Invest is currently generating about 0.17 per unit of risk. If you would invest  10,435  in BankInv Kort HY on March 27, 2025 and sell it today you would earn a total of  175.00  from holding BankInv Kort HY or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.38%
Values	Daily Returns

BankInv Kort HY  vs.  Danske Invest

BankInv Kort HY

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BankInv Kort HY are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, BankInv Kort is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Danske Invest

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Danske Invest are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Danske Invest is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BankInv Kort and Danske Invest

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

The idea behind BankInv Kort HY and 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.