Correlation Between Hvidbjerg Bank and Danske Invest

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

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

Diversification Opportunities for Hvidbjerg Bank and Danske Invest

0.73

Correlation Coefficient

Hvidbjerg Bank  Danske Invest

Poor diversification

The 3 months correlation between Hvidbjerg and Danske is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hvidbjerg Bank and Danske Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest and Hvidbjerg Bank 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 Hvidbjerg Bank 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 Hvidbjerg Bank i.e., Hvidbjerg Bank and Danske Invest go up and down completely randomly.

Pair Corralation between Hvidbjerg Bank and Danske Invest

Assuming the 90 days trading horizon Hvidbjerg Bank is expected to generate 17.08 times more return on investment than Danske Invest. However, Hvidbjerg Bank is 17.08 times more volatile than Danske Invest . It trades about 0.06 of its potential returns per unit of risk. Danske Invest is currently generating about 0.32 per unit of risk. If you would invest  11,600  in Hvidbjerg Bank on September 13, 2024 and sell it today you would earn a total of  500.00  from holding Hvidbjerg Bank or generate 4.31% return on investment over 90 days.

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

Hvidbjerg Bank  vs.  Danske Invest

Hvidbjerg Bank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hvidbjerg Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Hvidbjerg Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Danske Invest

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Danske Invest are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Danske Invest is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hvidbjerg Bank and Danske Invest

The main advantage of trading using opposite Hvidbjerg Bank and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hvidbjerg Bank 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 Hvidbjerg Bank 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.