Correlation Between Danske Bank and Apple
Can any of the company-specific risk be diversified away by investing in both Danske Bank and Apple 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 Danske Bank and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Bank AS and Apple Inc, you can compare the effects of market volatilities on Danske Bank and Apple 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 Danske Bank with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and Apple.
Diversification Opportunities for Danske Bank and Apple
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Danske and Apple is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Danske 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 Danske Bank AS are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Danske Bank i.e., Danske Bank and Apple go up and down completely randomly.
Pair Corralation between Danske Bank and Apple
Assuming the 90 days trading horizon Danske Bank AS is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Danske Bank AS is 1.27 times less risky than Apple. The stock trades about -0.03 of its potential returns per unit of risk. The Apple Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 16,971 in Apple Inc on January 26, 2024 and sell it today you would lose (69.00) from holding Apple Inc or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Danske Bank AS vs. Apple Inc
Performance |
| Timeline |
| Danske Bank AS |
| Apple Inc |
Danske Bank and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and Apple
The main advantage of trading using opposite Danske Bank and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Bank position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Danske Bank vs. Bavarian Nordic | Danske Bank vs. DSV Panalpina AS | Danske Bank vs. Vestas Wind Systems | Danske Bank vs. Ambu 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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