Correlation Between Handelsinvest Nordamerika and DSV Panalpina

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

By analyzing existing cross correlation between Handelsinvest Nordamerika and DSV Panalpina AS, you can compare the effects of market volatilities on Handelsinvest Nordamerika 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 Handelsinvest Nordamerika with a short position of DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handelsinvest Nordamerika and DSV Panalpina.

Diversification Opportunities for Handelsinvest Nordamerika and DSV Panalpina

-0.17

Correlation Coefficient

Handelsinvest Nordamerika  DSV Panalpina

Good diversification

The 3 months correlation between Handelsinvest and DSV is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Handelsinvest Nordamerika 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 Handelsinvest Nordamerika 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 Handelsinvest Nordamerika 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 Handelsinvest Nordamerika i.e., Handelsinvest Nordamerika and DSV Panalpina go up and down completely randomly.

Pair Corralation between Handelsinvest Nordamerika and DSV Panalpina

Assuming the 90 days trading horizon Handelsinvest Nordamerika is expected to generate 0.53 times more return on investment than DSV Panalpina. However, Handelsinvest Nordamerika is 1.9 times less risky than DSV Panalpina. It trades about 0.0 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.24 per unit of risk. If you would invest  24,392  in Handelsinvest Nordamerika on February 11, 2024 and sell it today you would lose (14.00) from holding Handelsinvest Nordamerika or give up 0.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Handelsinvest Nordamerika  vs.  DSV Panalpina AS

Handelsinvest Nordamerika

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Handelsinvest Nordamerika are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Handelsinvest Nordamerika is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DSV Panalpina AS

Risk-Adjusted Performance

0 of 100

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 unfluctuating 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.

Pair Trading with Handelsinvest Nordamerika and DSV Panalpina

The main advantage of trading using opposite Handelsinvest Nordamerika and DSV Panalpina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handelsinvest Nordamerika 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 Handelsinvest Nordamerika 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.