Correlation Between Spar Nord and Alefarm Brewing
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Alefarm Brewing 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 Spar Nord and Alefarm Brewing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spar Nord Bank and Alefarm Brewing AS, you can compare the effects of market volatilities on Spar Nord and Alefarm Brewing 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 Spar Nord with a short position of Alefarm Brewing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Alefarm Brewing.
Diversification Opportunities for Spar Nord and Alefarm Brewing
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Spar and Alefarm is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Alefarm Brewing AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alefarm Brewing AS and Spar Nord 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 Spar Nord Bank are associated (or correlated) with Alefarm Brewing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alefarm Brewing AS has no effect on the direction of Spar Nord i.e., Spar Nord and Alefarm Brewing go up and down completely randomly.
Pair Corralation between Spar Nord and Alefarm Brewing
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 0.33 times more return on investment than Alefarm Brewing. However, Spar Nord Bank is 3.02 times less risky than Alefarm Brewing. It trades about 0.21 of its potential returns per unit of risk. Alefarm Brewing AS is currently generating about -0.08 per unit of risk. If you would invest 13,100 in Spar Nord Bank on August 31, 2024 and sell it today you would earn a total of 760.00 from holding Spar Nord Bank or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Alefarm Brewing AS
Performance |
| Timeline |
| Spar Nord Bank |
| Alefarm Brewing AS |
Spar Nord and Alefarm Brewing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Alefarm Brewing
The main advantage of trading using opposite Spar Nord and Alefarm Brewing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Alefarm Brewing 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 Alefarm Brewing will offset losses from the drop in Alefarm Brewing's long position.| Spar Nord vs. Sydbank AS | Spar Nord vs. Jyske Bank AS | Spar Nord vs. Alm Brand | Spar Nord vs. Nordea Bank Abp |
| Alefarm Brewing vs. Sparinvest INDEX Globale | Alefarm Brewing vs. Bavarian Nordic | Alefarm Brewing vs. Investeringsselskabet Luxor AS | Alefarm Brewing vs. cBrain 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |