Correlation Between H Lundbeck and SP Group
Can any of the company-specific risk be diversified away by investing in both H Lundbeck and SP Group 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 H Lundbeck and SP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H Lundbeck AS and SP Group AS, you can compare the effects of market volatilities on H Lundbeck and SP Group 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 H Lundbeck with a short position of SP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of H Lundbeck and SP Group.
Diversification Opportunities for H Lundbeck and SP Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HLUN-A and SPG is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding H Lundbeck AS and SP Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Group AS and H Lundbeck 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 H Lundbeck AS are associated (or correlated) with SP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Group AS has no effect on the direction of H Lundbeck i.e., H Lundbeck and SP Group go up and down completely randomly.
Pair Corralation between H Lundbeck and SP Group
Assuming the 90 days trading horizon H Lundbeck is expected to generate 2.28 times less return on investment than SP Group. But when comparing it to its historical volatility, H Lundbeck AS is 1.45 times less risky than SP Group. It trades about 0.09 of its potential returns per unit of risk. SP Group AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 18,640 in SP Group AS on August 25, 2024 and sell it today you would earn a total of 14,010 from holding SP Group AS or generate 75.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H Lundbeck AS vs. SP Group AS
Performance |
| Timeline |
| H Lundbeck AS |
| SP Group AS |
H Lundbeck and SP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H Lundbeck and SP Group
The main advantage of trading using opposite H Lundbeck and SP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H Lundbeck position performs unexpectedly, SP Group 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 SP Group will offset losses from the drop in SP Group's long position.| H Lundbeck vs. H Lundbeck AS | H Lundbeck vs. GN Store Nord | H Lundbeck vs. Nordea Bank Abp | H Lundbeck vs. FLSmidth Co |
| SP Group vs. Schouw Co | SP Group vs. Per Aarsleff Holding | SP Group vs. HH International AS | SP Group vs. DFDS 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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