Correlation Between OMX Copenhagen and TCM
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By analyzing existing cross correlation between OMX Copenhagen All and TCM Group, you can compare the effects of market volatilities on OMX Copenhagen and TCM 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 OMX Copenhagen with a short position of TCM. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Copenhagen and TCM.
Diversification Opportunities for OMX Copenhagen and TCM
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OMX and TCM is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding OMX Copenhagen All and TCM Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCM Group and OMX Copenhagen 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 OMX Copenhagen All are associated (or correlated) with TCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCM Group has no effect on the direction of OMX Copenhagen i.e., OMX Copenhagen and TCM go up and down completely randomly.
Pair Corralation between OMX Copenhagen and TCM
Assuming the 90 days trading horizon OMX Copenhagen is expected to generate 1.6 times less return on investment than TCM. But when comparing it to its historical volatility, OMX Copenhagen All is 1.28 times less risky than TCM. It trades about 0.03 of its potential returns per unit of risk. TCM Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,980 in TCM Group on January 31, 2024 and sell it today you would earn a total of 100.00 from holding TCM Group or generate 2.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
OMX Copenhagen All vs. TCM Group
Performance |
Timeline |
OMX Copenhagen and TCM Volatility Contrast
Predicted Return Density |
Returns |
OMX Copenhagen All
Pair trading matchups for OMX Copenhagen
TCM Group
Pair trading matchups for TCM
Pair Trading with OMX Copenhagen and TCM
The main advantage of trading using opposite OMX Copenhagen and TCM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Copenhagen position performs unexpectedly, TCM 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 TCM will offset losses from the drop in TCM's long position.OMX Copenhagen vs. Laan Spar Bank | OMX Copenhagen vs. Skjern Bank AS | OMX Copenhagen vs. Kreditbanken AS | OMX Copenhagen vs. Groenlandsbanken 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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