Correlation Between Pandora A/S and Federal Home
Can any of the company-specific risk be diversified away by investing in both Pandora A/S and Federal Home 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 A/S and Federal Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pandora AS and Federal Home Loan, you can compare the effects of market volatilities on Pandora A/S and Federal Home 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 A/S with a short position of Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora A/S and Federal Home.
Diversification Opportunities for Pandora A/S and Federal Home
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pandora and Federal is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan and Pandora A/S 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 Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of Pandora A/S i.e., Pandora A/S and Federal Home go up and down completely randomly.
Pair Corralation between Pandora A/S and Federal Home
Assuming the 90 days horizon Pandora AS is expected to generate 0.43 times more return on investment than Federal Home. However, Pandora AS is 2.33 times less risky than Federal Home. It trades about 0.09 of its potential returns per unit of risk. Federal Home Loan is currently generating about -0.01 per unit of risk. If you would invest 14,815 in Pandora AS on February 3, 2024 and sell it today you would earn a total of 550.00 from holding Pandora AS or generate 3.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Pandora AS vs. Federal Home Loan
Performance |
Timeline |
Pandora A/S |
Federal Home Loan |
Pandora A/S and Federal Home Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pandora A/S and Federal Home
The main advantage of trading using opposite Pandora A/S and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pandora A/S position performs unexpectedly, Federal Home 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 Federal Home will offset losses from the drop in Federal Home's long position.Pandora A/S vs. GigaMedia | Pandora A/S vs. Eidesvik Offshore ASA | Pandora A/S vs. China Communications Services | Pandora A/S vs. Townsquare Media |
Federal Home vs. Ally Financial | Federal Home vs. Walker Dunlop | Federal Home vs. Hercules Capital | Federal Home vs. DIVERSIFIED ROYALTY |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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