Correlation Between CARYSIL and DKIDKA

Can any of the company-specific risk be diversified away by investing in both CARYSIL and DKIDKA 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 CARYSIL and DKIDKA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CARYSIL LIMITED and Investeringsforeningen Danske Invest, you can compare the effects of market volatilities on CARYSIL and DKIDKA 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 CARYSIL with a short position of DKIDKA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARYSIL and DKIDKA.

Diversification Opportunities for CARYSIL and DKIDKA

-0.4

Correlation Coefficient

CARYSIL  DKIDKA

Very good diversification

The 3 months correlation between CARYSIL and DKIDKA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CARYSIL LIMITED and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen and CARYSIL 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 CARYSIL LIMITED are associated (or correlated) with DKIDKA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of CARYSIL i.e., CARYSIL and DKIDKA go up and down completely randomly.

Pair Corralation between CARYSIL and DKIDKA

Assuming the 90 days trading horizon CARYSIL LIMITED is expected to under-perform the DKIDKA. In addition to that, CARYSIL is 2.1 times more volatile than Investeringsforeningen Danske Invest. It trades about -0.2 of its total potential returns per unit of risk. Investeringsforeningen Danske Invest is currently generating about -0.01 per unit of volatility. If you would invest  122,680  in Investeringsforeningen Danske Invest on February 4, 2024 and sell it today you would lose (220.00) from holding Investeringsforeningen Danske Invest or give up 0.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	86.96%
Values	Daily Returns

CARYSIL LIMITED  vs.  Investeringsforeningen Danske

CARYSIL LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARYSIL LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CARYSIL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Investeringsforeningen

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak forward-looking signals, DKIDKA may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with CARYSIL and DKIDKA

The main advantage of trading using opposite CARYSIL and DKIDKA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARYSIL position performs unexpectedly, DKIDKA 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 DKIDKA will offset losses from the drop in DKIDKA's long position.

The idea behind CARYSIL LIMITED and Investeringsforeningen Danske Invest 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.