Correlation Between Laan Spar and Kreditbanken
Can any of the company-specific risk be diversified away by investing in both Laan Spar and Kreditbanken 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 Kreditbanken 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 Kreditbanken AS, you can compare the effects of market volatilities on Laan Spar and Kreditbanken 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 Kreditbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laan Spar and Kreditbanken.
Diversification Opportunities for Laan Spar and Kreditbanken
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Laan and Kreditbanken is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Laan Spar Bank and Kreditbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kreditbanken 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 Kreditbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kreditbanken AS has no effect on the direction of Laan Spar i.e., Laan Spar and Kreditbanken go up and down completely randomly.
Pair Corralation between Laan Spar and Kreditbanken
Assuming the 90 days trading horizon Laan Spar is expected to generate 6.66 times less return on investment than Kreditbanken. But when comparing it to its historical volatility, Laan Spar Bank is 1.01 times less risky than Kreditbanken. It trades about 0.01 of its potential returns per unit of risk. Kreditbanken AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 450,000 in Kreditbanken AS on October 20, 2024 and sell it today you would earn a total of 75,000 from holding Kreditbanken AS or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laan Spar Bank vs. Kreditbanken AS
Performance |
| Timeline |
| Laan Spar Bank |
| Kreditbanken AS |
Laan Spar and Kreditbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laan Spar and Kreditbanken
The main advantage of trading using opposite Laan Spar and Kreditbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laan Spar position performs unexpectedly, Kreditbanken 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 Kreditbanken will offset losses from the drop in Kreditbanken'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 |
| Kreditbanken vs. Lollands Bank | Kreditbanken vs. Groenlandsbanken AS | Kreditbanken vs. Skjern Bank AS | Kreditbanken vs. Djurslands Bank |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |