Correlation Between DSV Panalpina and BankInvest Value

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

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

Diversification Opportunities for DSV Panalpina and BankInvest Value

0.62

Correlation Coefficient

DSV Panalpina  BankInvest Value

Poor diversification

The 3 months correlation between DSV and BankInvest is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and BankInvest Value Globale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Value Globale and DSV Panalpina 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 DSV Panalpina AS are associated (or correlated) with BankInvest Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Value Globale has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and BankInvest Value go up and down completely randomly.

Pair Corralation between DSV Panalpina and BankInvest Value

Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 2.5 times more return on investment than BankInvest Value. However, DSV Panalpina is 2.5 times more volatile than BankInvest Value Globale. It trades about 0.18 of its potential returns per unit of risk. BankInvest Value Globale is currently generating about 0.25 per unit of risk. If you would invest  124,950  in DSV Panalpina AS on September 11, 2024 and sell it today you would earn a total of  28,850  from holding DSV Panalpina AS or generate 23.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	83.08%
Values	Daily Returns

DSV Panalpina AS  vs.  BankInvest Value Globale

DSV Panalpina AS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DSV Panalpina displayed solid returns over the last few months and may actually be approaching a breakup point.

BankInvest Value Globale

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Value Globale are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BankInvest Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with DSV Panalpina and BankInvest Value

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

The idea behind DSV Panalpina AS and BankInvest Value Globale 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.