Correlation Between Laan Spar and Danske Andelskassers
Can any of the company-specific risk be diversified away by investing in both Laan Spar and Danske Andelskassers 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 Laan Spar and Danske Andelskassers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laan Spar Bank and Danske Andelskassers Bank, you can compare the effects of market volatilities on Laan Spar and Danske Andelskassers 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 Laan Spar with a short position of Danske Andelskassers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laan Spar and Danske Andelskassers.
Diversification Opportunities for Laan Spar and Danske Andelskassers
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Laan and Danske is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Laan Spar Bank and Danske Andelskassers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Andelskassers Bank and Laan Spar 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 Laan Spar Bank are associated (or correlated) with Danske Andelskassers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Andelskassers Bank has no effect on the direction of Laan Spar i.e., Laan Spar and Danske Andelskassers go up and down completely randomly.
Pair Corralation between Laan Spar and Danske Andelskassers
Assuming the 90 days trading horizon Laan Spar Bank is expected to under-perform the Danske Andelskassers. But the stock apears to be less risky and, when comparing its historical volatility, Laan Spar Bank is 1.18 times less risky than Danske Andelskassers. The stock trades about -0.1 of its potential returns per unit of risk. The Danske Andelskassers Bank is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,280 in Danske Andelskassers Bank on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Danske Andelskassers Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Laan Spar Bank vs. Danske Andelskassers Bank
Performance |
| Timeline |
| Laan Spar Bank |
| Danske Andelskassers Bank |
Laan Spar and Danske Andelskassers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laan Spar and Danske Andelskassers
The main advantage of trading using opposite Laan Spar and Danske Andelskassers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laan Spar position performs unexpectedly, Danske Andelskassers 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 Danske Andelskassers will offset losses from the drop in Danske Andelskassers' long position.| Laan Spar vs. FLSmidth Co | Laan Spar vs. Danske Bank AS | Laan Spar vs. ISS AS | Laan Spar vs. DSV Panalpina AS |
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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.
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