Correlation Between BAIGAI and DSV Panalpina

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Can any of the company-specific risk be diversified away by investing in both BAIGAI and DSV Panalpina 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 BAIGAI and DSV Panalpina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investeringsforeningen Bankinvest and DSV Panalpina AS, you can compare the effects of market volatilities on BAIGAI and DSV Panalpina 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 BAIGAI with a short position of DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIGAI and DSV Panalpina.

Diversification Opportunities for BAIGAI and DSV Panalpina

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between BAIGAI and DSV is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Bankinv and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS and BAIGAI 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 Investeringsforeningen Bankinvest are associated (or correlated) with DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of BAIGAI i.e., BAIGAI and DSV Panalpina go up and down completely randomly.

Pair Corralation between BAIGAI and DSV Panalpina

Assuming the 90 days trading horizon Investeringsforeningen Bankinvest is expected to generate 0.41 times more return on investment than DSV Panalpina. However, Investeringsforeningen Bankinvest is 2.42 times less risky than DSV Panalpina. It trades about 0.26 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about 0.1 per unit of risk. If you would invest  12,265  in Investeringsforeningen Bankinvest on December 29, 2023 and sell it today you would earn a total of  410.00  from holding Investeringsforeningen Bankinvest or generate 3.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Investeringsforeningen Bankinv  vs.  DSV Panalpina AS

 Performance 
       Timeline  
Investeringsforeningen 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Bankinvest are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat conflicting basic indicators, BAIGAI may actually be approaching a critical reversion point that can send shares even higher in April 2024.
DSV Panalpina AS 

Risk-Adjusted Performance

0 of 100

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

BAIGAI and DSV Panalpina Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BAIGAI and DSV Panalpina

The main advantage of trading using opposite BAIGAI and DSV Panalpina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIGAI position performs unexpectedly, DSV Panalpina 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 DSV Panalpina will offset losses from the drop in DSV Panalpina's long position.
The idea behind Investeringsforeningen Bankinvest and DSV Panalpina 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.
Check out your portfolio center.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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