Correlation Between North Media and Laan Spar
Can any of the company-specific risk be diversified away by investing in both North Media and Laan Spar 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 North Media and Laan Spar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Media AS and Laan Spar Bank, you can compare the effects of market volatilities on North Media and Laan Spar 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 North Media with a short position of Laan Spar. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Media and Laan Spar.
Diversification Opportunities for North Media and Laan Spar
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between North and Laan is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding North Media AS and Laan Spar Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laan Spar Bank and North Media 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 North Media AS are associated (or correlated) with Laan Spar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laan Spar Bank has no effect on the direction of North Media i.e., North Media and Laan Spar go up and down completely randomly.
Pair Corralation between North Media and Laan Spar
Assuming the 90 days trading horizon North Media AS is expected to under-perform the Laan Spar. In addition to that, North Media is 1.51 times more volatile than Laan Spar Bank. It trades about -0.08 of its total potential returns per unit of risk. Laan Spar Bank is currently generating about 0.01 per unit of volatility. If you would invest 69,000 in Laan Spar Bank on October 20, 2024 and sell it today you would earn a total of 500.00 from holding Laan Spar Bank or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Media AS vs. Laan Spar Bank
Performance |
| Timeline |
| North Media AS |
| Laan Spar Bank |
North Media and Laan Spar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Media and Laan Spar
The main advantage of trading using opposite North Media and Laan Spar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Media position performs unexpectedly, Laan Spar 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 Laan Spar will offset losses from the drop in Laan Spar's long position.| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group AS |
| Laan Spar vs. Vestjysk Bank AS | Laan Spar vs. Skjern Bank AS | Laan Spar vs. Groenlandsbanken AS | Laan Spar vs. Kreditbanken 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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