Correlation Between Pandora AS and Spar Nord
Can any of the company-specific risk be diversified away by investing in both Pandora AS 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 Pandora AS and Spar Nord into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pandora AS and Spar Nord Bank, you can compare the effects of market volatilities on Pandora AS 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 Pandora AS with a short position of Spar Nord. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora AS and Spar Nord.
Diversification Opportunities for Pandora AS and Spar Nord
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pandora and Spar is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Pandora 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 Pandora AS 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 Pandora 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 Pandora AS i.e., Pandora AS and Spar Nord go up and down completely randomly.
Pair Corralation between Pandora AS and Spar Nord
Assuming the 90 days trading horizon Pandora AS is expected to generate 0.67 times more return on investment than Spar Nord. However, Pandora AS is 1.49 times less risky than Spar Nord. It trades about 0.1 of its potential returns per unit of risk. Spar Nord Bank is currently generating about 0.06 per unit of risk. If you would invest 63,302 in Pandora AS on November 9, 2024 and sell it today you would earn a total of 71,398 from holding Pandora AS or generate 112.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pandora AS vs. Spar Nord Bank
Performance |
| Timeline |
| Pandora AS |
| Spar Nord Bank |
Pandora AS and Spar Nord Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pandora AS and Spar Nord
The main advantage of trading using opposite Pandora AS and Spar Nord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pandora AS 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.| Pandora AS vs. Ralph Lauren Corp | Pandora AS vs. Tapestry | Pandora AS vs. PVH Corp | Pandora AS vs. Levi Strauss Co |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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