Correlation Between Accunia Invest and Vestjysk Bank

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

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

Diversification Opportunities for Accunia Invest and Vestjysk Bank

0.29

Correlation Coefficient

Accunia Invest  Vestjysk Bank

Modest diversification

The 3 months correlation between Accunia and Vestjysk is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Accunia Invest EUR and Vestjysk Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestjysk Bank AS and Accunia Invest 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 Accunia Invest EUR are associated (or correlated) with Vestjysk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestjysk Bank AS has no effect on the direction of Accunia Invest i.e., Accunia Invest and Vestjysk Bank go up and down completely randomly.

Pair Corralation between Accunia Invest and Vestjysk Bank

Assuming the 90 days trading horizon Accunia Invest EUR is expected to generate 0.52 times more return on investment than Vestjysk Bank. However, Accunia Invest EUR is 1.91 times less risky than Vestjysk Bank. It trades about 0.02 of its potential returns per unit of risk. Vestjysk Bank AS is currently generating about -0.08 per unit of risk. If you would invest  98,420  in Accunia Invest EUR on September 3, 2024 and sell it today you would earn a total of  440.00  from holding Accunia Invest EUR or generate 0.45% return on investment over 90 days.

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

Accunia Invest EUR  vs.  Vestjysk Bank AS

Accunia Invest EUR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accunia Invest EUR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Accunia Invest is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Vestjysk Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vestjysk Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vestjysk Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Accunia Invest and Vestjysk Bank

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

The idea behind Accunia Invest EUR and Vestjysk Bank 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.