Correlation Between Alm Brand and Sparekassen Sjaelland
Can any of the company-specific risk be diversified away by investing in both Alm Brand and Sparekassen Sjaelland 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 Alm Brand and Sparekassen Sjaelland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alm Brand and Sparekassen Sjaelland Fyn AS, you can compare the effects of market volatilities on Alm Brand and Sparekassen Sjaelland 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 Alm Brand with a short position of Sparekassen Sjaelland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alm Brand and Sparekassen Sjaelland.
Diversification Opportunities for Alm Brand and Sparekassen Sjaelland
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alm and Sparekassen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alm Brand and Sparekassen Sjaelland Fyn AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparekassen Sjaelland and Alm Brand 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 Alm Brand are associated (or correlated) with Sparekassen Sjaelland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparekassen Sjaelland has no effect on the direction of Alm Brand i.e., Alm Brand and Sparekassen Sjaelland go up and down completely randomly.
Pair Corralation between Alm Brand and Sparekassen Sjaelland
Assuming the 90 days trading horizon Alm Brand is expected to generate 2.78 times less return on investment than Sparekassen Sjaelland. But when comparing it to its historical volatility, Alm Brand is 1.36 times less risky than Sparekassen Sjaelland. It trades about 0.2 of its potential returns per unit of risk. Sparekassen Sjaelland Fyn AS is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 26,000 in Sparekassen Sjaelland Fyn AS on November 27, 2024 and sell it today you would earn a total of 2,750 from holding Sparekassen Sjaelland Fyn AS or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alm Brand vs. Sparekassen Sjaelland Fyn AS
Performance |
| Timeline |
| Alm Brand |
| Sparekassen Sjaelland |
Alm Brand and Sparekassen Sjaelland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alm Brand and Sparekassen Sjaelland
The main advantage of trading using opposite Alm Brand and Sparekassen Sjaelland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alm Brand position performs unexpectedly, Sparekassen Sjaelland 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 Sparekassen Sjaelland will offset losses from the drop in Sparekassen Sjaelland's long position.The idea behind Alm Brand and Sparekassen Sjaelland Fyn 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.| Sparekassen Sjaelland vs. Sydbank AS | Sparekassen Sjaelland vs. Spar Nord Bank | Sparekassen Sjaelland vs. Per Aarsleff Holding | Sparekassen Sjaelland vs. Vestjysk Bank 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |