Correlation Between Flgger Group and Djurslands Bank

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

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

Diversification Opportunities for Flgger Group and Djurslands Bank

-0.27

Correlation Coefficient

Flgger Group  Djurslands Bank

Very good diversification

The 3 months correlation between Flgger and Djurslands is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Flgger group AS and Djurslands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djurslands Bank and Flgger Group 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 Flgger group AS are associated (or correlated) with Djurslands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Djurslands Bank has no effect on the direction of Flgger Group i.e., Flgger Group and Djurslands Bank go up and down completely randomly.

Pair Corralation between Flgger Group and Djurslands Bank

Assuming the 90 days trading horizon Flgger group AS is expected to under-perform the Djurslands Bank. In addition to that, Flgger Group is 1.06 times more volatile than Djurslands Bank. It trades about -0.09 of its total potential returns per unit of risk. Djurslands Bank is currently generating about 0.02 per unit of volatility. If you would invest  51,500  in Djurslands Bank on September 4, 2024 and sell it today you would earn a total of  500.00  from holding Djurslands Bank or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Flgger group AS  vs.  Djurslands Bank

Flgger group AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Flgger group AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Flgger Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Djurslands Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Djurslands Bank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Djurslands 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 Flgger Group and Djurslands Bank

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

The idea behind Flgger group AS and Djurslands Bank 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.