Correlation Between Conferize and Laan Spar
Can any of the company-specific risk be diversified away by investing in both Conferize and Laan Spar 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 Conferize and Laan Spar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conferize AS and Laan Spar Bank, you can compare the effects of market volatilities on Conferize and Laan Spar 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 Conferize with a short position of Laan Spar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conferize and Laan Spar.
Diversification Opportunities for Conferize and Laan Spar
Very good diversification
The 3 months correlation between Conferize and Laan is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Conferize AS and Laan Spar Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laan Spar Bank and Conferize 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 Conferize AS are associated (or correlated) with Laan Spar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laan Spar Bank has no effect on the direction of Conferize i.e., Conferize and Laan Spar go up and down completely randomly.
Pair Corralation between Conferize and Laan Spar
Assuming the 90 days trading horizon Conferize AS is expected to generate 11.73 times more return on investment than Laan Spar. However, Conferize is 11.73 times more volatile than Laan Spar Bank. It trades about 0.24 of its potential returns per unit of risk. Laan Spar Bank is currently generating about 0.09 per unit of risk. If you would invest 0.55 in Conferize AS on October 26, 2024 and sell it today you would earn a total of 0.25 from holding Conferize AS or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conferize AS vs. Laan Spar Bank
Performance |
| Timeline |
| Conferize AS |
| Laan Spar Bank |
Conferize and Laan Spar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conferize and Laan Spar
The main advantage of trading using opposite Conferize and Laan Spar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conferize position performs unexpectedly, Laan Spar 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 Laan Spar will offset losses from the drop in Laan Spar's long position.The idea behind Conferize AS and Laan Spar Bank 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.| Laan Spar vs. Vestjysk Bank AS | Laan Spar vs. Skjern Bank AS | Laan Spar vs. Groenlandsbanken AS | Laan Spar vs. Kreditbanken 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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