Correlation Between Nordfyns Bank and Spar Nord
Can any of the company-specific risk be diversified away by investing in both Nordfyns Bank 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 Nordfyns Bank and Spar Nord into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordfyns Bank AS and Spar Nord Bank, you can compare the effects of market volatilities on Nordfyns Bank 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 Nordfyns Bank with a short position of Spar Nord. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordfyns Bank and Spar Nord.
Diversification Opportunities for Nordfyns Bank and Spar Nord
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordfyns and Spar is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nordfyns Bank AS 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 Nordfyns Bank 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 Nordfyns Bank AS 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 Nordfyns Bank i.e., Nordfyns Bank and Spar Nord go up and down completely randomly.
Pair Corralation between Nordfyns Bank and Spar Nord
Assuming the 90 days trading horizon Nordfyns Bank AS is expected to under-perform the Spar Nord. But the stock apears to be less risky and, when comparing its historical volatility, Nordfyns Bank AS is 2.2 times less risky than Spar Nord. The stock trades about -0.33 of its potential returns per unit of risk. The Spar Nord Bank is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 13,760 in Spar Nord Bank on August 27, 2024 and sell it today you would lose (120.00) from holding Spar Nord Bank or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordfyns Bank AS vs. Spar Nord Bank
Performance |
| Timeline |
| Nordfyns Bank AS |
| Spar Nord Bank |
Nordfyns Bank and Spar Nord Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordfyns Bank and Spar Nord
The main advantage of trading using opposite Nordfyns Bank and Spar Nord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordfyns Bank 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.| Nordfyns Bank vs. Dataproces Group AS | Nordfyns Bank vs. cBrain AS | Nordfyns Bank vs. ALK Abell AS | Nordfyns Bank vs. ChemoMetec AS |
| Spar Nord vs. Sydbank AS | Spar Nord vs. Jyske Bank AS | Spar Nord vs. Alm Brand | Spar Nord vs. Nordea Bank Abp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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