Correlation Between Laan Spar and Konsolidator
Can any of the company-specific risk be diversified away by investing in both Laan Spar and Konsolidator 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 Konsolidator 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 Konsolidator AS, you can compare the effects of market volatilities on Laan Spar and Konsolidator 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 Konsolidator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laan Spar and Konsolidator.
Diversification Opportunities for Laan Spar and Konsolidator
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Laan and Konsolidator is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Laan Spar Bank and Konsolidator AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konsolidator AS 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 Konsolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konsolidator AS has no effect on the direction of Laan Spar i.e., Laan Spar and Konsolidator go up and down completely randomly.
Pair Corralation between Laan Spar and Konsolidator
Assuming the 90 days trading horizon Laan Spar Bank is expected to generate 0.42 times more return on investment than Konsolidator. However, Laan Spar Bank is 2.37 times less risky than Konsolidator. It trades about 0.35 of its potential returns per unit of risk. Konsolidator AS is currently generating about 0.03 per unit of risk. If you would invest 69,000 in Laan Spar Bank on November 27, 2024 and sell it today you would earn a total of 6,500 from holding Laan Spar Bank or generate 9.42% 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. Konsolidator AS
Performance |
| Timeline |
| Laan Spar Bank |
| Konsolidator AS |
Laan Spar and Konsolidator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laan Spar and Konsolidator
The main advantage of trading using opposite Laan Spar and Konsolidator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laan Spar position performs unexpectedly, Konsolidator 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 Konsolidator will offset losses from the drop in Konsolidator's long position.| Laan Spar vs. Vestjysk Bank AS | Laan Spar vs. Skjern Bank AS | Laan Spar vs. Groenlandsbanken AS | Laan Spar vs. Kreditbanken AS |
| Konsolidator vs. Scandinavian Medical Solutions | Konsolidator vs. Lollands Bank | Konsolidator vs. PARKEN Sport Entertainment | Konsolidator vs. BankIn Bredygt Klimaakt |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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