Correlation Between Ford and Nykredit Invest
Can any of the company-specific risk be diversified away by investing in both Ford and Nykredit 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 Ford and Nykredit Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Nykredit Invest Danske, you can compare the effects of market volatilities on Ford and Nykredit 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 Ford with a short position of Nykredit Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Nykredit Invest.
Diversification Opportunities for Ford and Nykredit Invest
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Nykredit is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Nykredit Invest Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Danske and Ford 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 Ford Motor are associated (or correlated) with Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Danske has no effect on the direction of Ford i.e., Ford and Nykredit Invest go up and down completely randomly.
Pair Corralation between Ford and Nykredit Invest
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Nykredit Invest. In addition to that, Ford is 2.84 times more volatile than Nykredit Invest Danske. It trades about -0.01 of its total potential returns per unit of risk. Nykredit Invest Danske is currently generating about -0.02 per unit of volatility. If you would invest 19,787 in Nykredit Invest Danske on January 20, 2024 and sell it today you would lose (137.00) from holding Nykredit Invest Danske or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Nykredit Invest Danske
Performance |
| Timeline |
| Ford Motor |
| Nykredit Invest Danske |
Ford and Nykredit Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Nykredit Invest
The main advantage of trading using opposite Ford and Nykredit Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Nykredit 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 Nykredit Invest will offset losses from the drop in Nykredit Invest's long position.The idea behind Ford Motor and Nykredit Invest Danske 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.| Nykredit Invest vs. Novo Nordisk AS | Nykredit Invest vs. Nordea Bank Abp | Nykredit Invest vs. DSV Panalpina AS | Nykredit Invest vs. AP Mller |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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