Correlation Between Maj Invest and Spar Nord
Can any of the company-specific risk be diversified away by investing in both Maj Invest and Spar Nord 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 Maj Invest and Spar Nord into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maj Invest Pension and Spar Nord Bank, you can compare the effects of market volatilities on Maj Invest and Spar Nord 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 Maj Invest with a short position of Spar Nord. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maj Invest and Spar Nord.
Diversification Opportunities for Maj Invest and Spar Nord
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maj and Spar is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Maj Invest Pension and Spar Nord Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spar Nord Bank and Maj Invest 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 Maj Invest Pension are associated (or correlated) with Spar Nord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spar Nord Bank has no effect on the direction of Maj Invest i.e., Maj Invest and Spar Nord go up and down completely randomly.
Pair Corralation between Maj Invest and Spar Nord
Assuming the 90 days trading horizon Maj Invest is expected to generate 2.06 times less return on investment than Spar Nord. But when comparing it to its historical volatility, Maj Invest Pension is 4.05 times less risky than Spar Nord. It trades about 0.13 of its potential returns per unit of risk. Spar Nord Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,565 in Spar Nord Bank on August 29, 2024 and sell it today you would earn a total of 3,955 from holding Spar Nord Bank or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maj Invest Pension vs. Spar Nord Bank
Performance |
| Timeline |
| Maj Invest Pension |
| Spar Nord Bank |
Maj Invest and Spar Nord Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maj Invest and Spar Nord
The main advantage of trading using opposite Maj Invest and Spar Nord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maj Invest position performs unexpectedly, Spar Nord 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 Spar Nord will offset losses from the drop in Spar Nord's long position.| Maj Invest vs. Novo Nordisk AS | Maj Invest vs. Nordea Bank Abp | Maj Invest vs. DSV Panalpina AS | Maj Invest vs. AP Mller |
| Spar Nord vs. Dataproces Group AS | Spar Nord vs. cBrain AS | Spar Nord vs. ALK Abell AS | Spar Nord vs. ChemoMetec 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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