Correlation Between Pandora AS and Target
Can any of the company-specific risk be diversified away by investing in both Pandora AS and Target 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 Pandora AS and Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pandora AS and Target, you can compare the effects of market volatilities on Pandora AS and Target 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 Pandora AS with a short position of Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora AS and Target.
Diversification Opportunities for Pandora AS and Target
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pandora and Target is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target and Pandora AS 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 Pandora AS are associated (or correlated) with Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of Pandora AS i.e., Pandora AS and Target go up and down completely randomly.
Pair Corralation between Pandora AS and Target
Assuming the 90 days horizon Pandora AS is expected to under-perform the Target. But the stock apears to be less risky and, when comparing its historical volatility, Pandora AS is 1.02 times less risky than Target. The stock trades about -0.25 of its potential returns per unit of risk. The Target is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 16,821 in Target on January 19, 2024 and sell it today you would lose (374.00) from holding Target or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pandora AS vs. Target
Performance |
| Timeline |
| Pandora AS |
| Target |
Pandora AS and Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pandora AS and Target
The main advantage of trading using opposite Pandora AS and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pandora AS position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.| Pandora AS vs. Astral Foods Limited | Pandora AS vs. Nomad Foods | Pandora AS vs. TYSON FOODS A | Pandora AS vs. BG Foods |
| Target vs. Betterware De Mexico | Target vs. Amexdrug | Target vs. Provident Bancorp | Target vs. Mersana Therapeutics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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