Correlation Between Konsolidator and DSV Panalpina

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

Diversification Opportunities for Konsolidator and DSV Panalpina

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Konsolidator and DSV is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Konsolidator AS 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 Konsolidator 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 Konsolidator AS 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 Konsolidator i.e., Konsolidator and DSV Panalpina go up and down completely randomly.

Pair Corralation between Konsolidator and DSV Panalpina

Assuming the 90 days trading horizon Konsolidator AS is expected to generate 3.51 times more return on investment than DSV Panalpina. However, Konsolidator is 3.51 times more volatile than DSV Panalpina AS. It trades about 0.0 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.01 per unit of risk. If you would invest  572.00  in Konsolidator AS on December 20, 2023 and sell it today you would lose (206.00) from holding Konsolidator AS or give up 36.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Konsolidator AS  vs.  DSV Panalpina AS

 Performance 
       Timeline  
Konsolidator AS 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Konsolidator AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Konsolidator is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Konsolidator and DSV Panalpina Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Konsolidator and DSV Panalpina

The main advantage of trading using opposite Konsolidator and DSV Panalpina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konsolidator 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 Konsolidator AS 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.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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