Correlation Between Laan Spar and Formuepleje Limittellus
Can any of the company-specific risk be diversified away by investing in both Laan Spar and Formuepleje Limittellus 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 Formuepleje Limittellus 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 Formuepleje Limittellus, you can compare the effects of market volatilities on Laan Spar and Formuepleje Limittellus 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 Formuepleje Limittellus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laan Spar and Formuepleje Limittellus.
Diversification Opportunities for Laan Spar and Formuepleje Limittellus
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Laan and Formuepleje is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Laan Spar Bank and Formuepleje Limittellus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formuepleje Limittellus 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 Formuepleje Limittellus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formuepleje Limittellus has no effect on the direction of Laan Spar i.e., Laan Spar and Formuepleje Limittellus go up and down completely randomly.
Pair Corralation between Laan Spar and Formuepleje Limittellus
Assuming the 90 days trading horizon Laan Spar Bank is expected to under-perform the Formuepleje Limittellus. In addition to that, Laan Spar is 1.69 times more volatile than Formuepleje Limittellus. It trades about -0.02 of its total potential returns per unit of risk. Formuepleje Limittellus is currently generating about 0.1 per unit of volatility. If you would invest 26,623 in Formuepleje Limittellus on September 2, 2024 and sell it today you would earn a total of 2,677 from holding Formuepleje Limittellus or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laan Spar Bank vs. Formuepleje Limittellus
Performance |
| Timeline |
| Laan Spar Bank |
| Formuepleje Limittellus |
Laan Spar and Formuepleje Limittellus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laan Spar and Formuepleje Limittellus
The main advantage of trading using opposite Laan Spar and Formuepleje Limittellus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laan Spar position performs unexpectedly, Formuepleje Limittellus 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 Formuepleje Limittellus will offset losses from the drop in Formuepleje Limittellus' long position.| Laan Spar vs. Sydbank AS | Laan Spar vs. Jyske Bank AS | Laan Spar vs. Alm Brand | Laan Spar vs. Nordea Bank Abp |
| Formuepleje Limittellus vs. Novo Nordisk AS | Formuepleje Limittellus vs. Nordea Bank Abp | Formuepleje Limittellus vs. DSV Panalpina AS | Formuepleje Limittellus vs. AP Mller |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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