Correlation Between Sparekassen Sjaelland and Fynske Bank
Can any of the company-specific risk be diversified away by investing in both Sparekassen Sjaelland and Fynske Bank 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 Sparekassen Sjaelland and Fynske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparekassen Sjaelland Fyn AS and Fynske Bank AS, you can compare the effects of market volatilities on Sparekassen Sjaelland and Fynske Bank 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 Sparekassen Sjaelland with a short position of Fynske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparekassen Sjaelland and Fynske Bank.
Diversification Opportunities for Sparekassen Sjaelland and Fynske Bank
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sparekassen and Fynske is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sparekassen Sjaelland Fyn AS and Fynske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fynske Bank AS and Sparekassen Sjaelland 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 Sparekassen Sjaelland Fyn AS are associated (or correlated) with Fynske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fynske Bank AS has no effect on the direction of Sparekassen Sjaelland i.e., Sparekassen Sjaelland and Fynske Bank go up and down completely randomly.
Pair Corralation between Sparekassen Sjaelland and Fynske Bank
Assuming the 90 days trading horizon Sparekassen Sjaelland Fyn AS is expected to generate 0.95 times more return on investment than Fynske Bank. However, Sparekassen Sjaelland Fyn AS is 1.06 times less risky than Fynske Bank. It trades about 0.31 of its potential returns per unit of risk. Fynske Bank AS is currently generating about 0.11 per unit of risk. If you would invest 24,450 in Sparekassen Sjaelland Fyn AS on October 24, 2024 and sell it today you would earn a total of 1,900 from holding Sparekassen Sjaelland Fyn AS or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparekassen Sjaelland Fyn AS vs. Fynske Bank AS
Performance |
| Timeline |
| Sparekassen Sjaelland |
| Fynske Bank AS |
Sparekassen Sjaelland and Fynske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparekassen Sjaelland and Fynske Bank
The main advantage of trading using opposite Sparekassen Sjaelland and Fynske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparekassen Sjaelland position performs unexpectedly, Fynske Bank 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 Fynske Bank will offset losses from the drop in Fynske Bank's long position.| Sparekassen Sjaelland vs. Sydbank AS | Sparekassen Sjaelland vs. Spar Nord Bank | Sparekassen Sjaelland vs. Per Aarsleff Holding | Sparekassen Sjaelland vs. Vestjysk Bank AS |
| Fynske Bank vs. Skjern Bank AS | Fynske Bank vs. Djurslands Bank | Fynske Bank vs. Sparekassen Sjaelland Fyn AS | Fynske Bank vs. Groenlandsbanken 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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