Correlation Between Laan Spar and PFA Invest
Can any of the company-specific risk be diversified away by investing in both Laan Spar and PFA Invest 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 PFA Invest 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 PFA Invest Kreditobligationer, you can compare the effects of market volatilities on Laan Spar and PFA Invest 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 PFA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laan Spar and PFA Invest.
Diversification Opportunities for Laan Spar and PFA Invest
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Laan and PFA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Laan Spar Bank and PFA Invest Kreditobligationer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFA Invest Kreditobl 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 PFA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFA Invest Kreditobl has no effect on the direction of Laan Spar i.e., Laan Spar and PFA Invest go up and down completely randomly.
Pair Corralation between Laan Spar and PFA Invest
Assuming the 90 days trading horizon Laan Spar is expected to generate 25.81 times less return on investment than PFA Invest. In addition to that, Laan Spar is 15.24 times more volatile than PFA Invest Kreditobligationer. It trades about 0.0 of its total potential returns per unit of risk. PFA Invest Kreditobligationer is currently generating about 0.44 per unit of volatility. If you would invest 10,169 in PFA Invest Kreditobligationer on September 4, 2024 and sell it today you would earn a total of 372.00 from holding PFA Invest Kreditobligationer or generate 3.66% 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. PFA Invest Kreditobligationer
Performance |
| Timeline |
| Laan Spar Bank |
| PFA Invest Kreditobl |
Laan Spar and PFA Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laan Spar and PFA Invest
The main advantage of trading using opposite Laan Spar and PFA Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laan Spar position performs unexpectedly, PFA Invest 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 PFA Invest will offset losses from the drop in PFA Invest'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 |
| PFA Invest vs. Vestjysk Bank AS | PFA Invest vs. Dataproces Group AS | PFA Invest vs. Moens Bank AS | PFA Invest vs. Prime Office 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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