Correlation Between Djurslands Bank and Laan Spar
Can any of the company-specific risk be diversified away by investing in both Djurslands Bank 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 Djurslands Bank and Laan Spar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Djurslands Bank and Laan Spar Bank, you can compare the effects of market volatilities on Djurslands Bank 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 Djurslands Bank with a short position of Laan Spar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Djurslands Bank and Laan Spar.
Diversification Opportunities for Djurslands Bank and Laan Spar
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Djurslands and Laan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Djurslands Bank 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 Djurslands Bank 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 Djurslands Bank 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 Djurslands Bank i.e., Djurslands Bank and Laan Spar go up and down completely randomly.
Pair Corralation between Djurslands Bank and Laan Spar
Assuming the 90 days trading horizon Djurslands Bank is expected to under-perform the Laan Spar. But the stock apears to be less risky and, when comparing its historical volatility, Djurslands Bank is 1.9 times less risky than Laan Spar. The stock trades about -0.13 of its potential returns per unit of risk. The Laan Spar Bank is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 63,000 in Laan Spar Bank on August 29, 2024 and sell it today you would earn a total of 5,000 from holding Laan Spar Bank or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Djurslands Bank vs. Laan Spar Bank
Performance |
| Timeline |
| Djurslands Bank |
| Laan Spar Bank |
Djurslands Bank and Laan Spar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Djurslands Bank and Laan Spar
The main advantage of trading using opposite Djurslands Bank and Laan Spar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Djurslands Bank 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.| Djurslands Bank vs. Skjern Bank AS | Djurslands Bank vs. Lollands Bank | Djurslands Bank vs. Kreditbanken AS | Djurslands Bank vs. Fynske Bank AS |
| Laan Spar vs. Dataproces Group AS | Laan Spar vs. cBrain AS | Laan Spar vs. ALK Abell AS | Laan Spar vs. ChemoMetec 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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