Correlation Between KERINGUNSPADR 1/10 and Pandora A/S

Can any of the company-specific risk be diversified away by investing in both KERINGUNSPADR 1/10 and Pandora A/S 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 KERINGUNSPADR 1/10 and Pandora A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KERINGUNSPADR 110 EO and Pandora AS, you can compare the effects of market volatilities on KERINGUNSPADR 1/10 and Pandora A/S 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 KERINGUNSPADR 1/10 with a short position of Pandora A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of KERINGUNSPADR 1/10 and Pandora A/S.

Diversification Opportunities for KERINGUNSPADR 1/10 and Pandora A/S

-0.37

Correlation Coefficient

KERINGUNSPADR 1/10  Pandora A/S

Very good diversification

The 3 months correlation between KERINGUNSPADR and Pandora is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding KERINGUNSPADR 110 EO and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora A/S and KERINGUNSPADR 1/10 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 KERINGUNSPADR 110 EO are associated (or correlated) with Pandora A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora A/S has no effect on the direction of KERINGUNSPADR 1/10 i.e., KERINGUNSPADR 1/10 and Pandora A/S go up and down completely randomly.

Pair Corralation between KERINGUNSPADR 1/10 and Pandora A/S

Assuming the 90 days trading horizon KERINGUNSPADR 110 EO is expected to under-perform the Pandora A/S. In addition to that, KERINGUNSPADR 1/10 is 2.01 times more volatile than Pandora AS. It trades about -0.13 of its total potential returns per unit of risk. Pandora AS is currently generating about -0.1 per unit of volatility. If you would invest  14,700  in Pandora AS on February 2, 2024 and sell it today you would lose (415.00) from holding Pandora AS or give up 2.82% of portfolio value over 90 days.

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

KERINGUNSPADR 110 EO  vs.  Pandora AS

KERINGUNSPADR 1/10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KERINGUNSPADR 110 EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pandora A/S

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pandora AS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pandora A/S reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KERINGUNSPADR 1/10 and Pandora A/S

The main advantage of trading using opposite KERINGUNSPADR 1/10 and Pandora A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KERINGUNSPADR 1/10 position performs unexpectedly, Pandora A/S 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 Pandora A/S will offset losses from the drop in Pandora A/S's long position.

The idea behind KERINGUNSPADR 110 EO and Pandora 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.