Correlation Between BankInvest Optima and Netcompany Group
Can any of the company-specific risk be diversified away by investing in both BankInvest Optima and Netcompany Group 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 BankInvest Optima and Netcompany Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankInvest Optima 30 and Netcompany Group AS, you can compare the effects of market volatilities on BankInvest Optima and Netcompany Group 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 BankInvest Optima with a short position of Netcompany Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Optima and Netcompany Group.
Diversification Opportunities for BankInvest Optima and Netcompany Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BankInvest and Netcompany is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Optima 30 and Netcompany Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcompany Group and BankInvest Optima 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 BankInvest Optima 30 are associated (or correlated) with Netcompany Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcompany Group has no effect on the direction of BankInvest Optima i.e., BankInvest Optima and Netcompany Group go up and down completely randomly.
Pair Corralation between BankInvest Optima and Netcompany Group
Assuming the 90 days trading horizon BankInvest Optima 30 is expected to generate 0.14 times more return on investment than Netcompany Group. However, BankInvest Optima 30 is 7.03 times less risky than Netcompany Group. It trades about -0.31 of its potential returns per unit of risk. Netcompany Group AS is currently generating about -0.27 per unit of risk. If you would invest 10,445 in BankInvest Optima 30 on January 24, 2024 and sell it today you would lose (160.00) from holding BankInvest Optima 30 or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
BankInvest Optima 30 vs. Netcompany Group AS
Performance |
| Timeline |
| BankInvest Optima |
| Netcompany Group |
BankInvest Optima and Netcompany Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankInvest Optima and Netcompany Group
The main advantage of trading using opposite BankInvest Optima and Netcompany Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankInvest Optima position performs unexpectedly, Netcompany Group 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 Netcompany Group will offset losses from the drop in Netcompany Group's long position.| BankInvest Optima vs. Novo Nordisk AS | BankInvest Optima vs. Nordea Bank Abp | BankInvest Optima vs. DSV Panalpina AS | BankInvest Optima vs. AP Mller |
| Netcompany Group vs. Penneo AS | Netcompany Group vs. Bactiquant AS | Netcompany Group vs. cBrain AS | Netcompany Group vs. FOM Technologies AS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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