Correlation Between Spar Nord and BioPorto
Can any of the company-specific risk be diversified away by investing in both Spar Nord and BioPorto 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 BioPorto 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 BioPorto, you can compare the effects of market volatilities on Spar Nord and BioPorto 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 BioPorto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and BioPorto.
Diversification Opportunities for Spar Nord and BioPorto
Very good diversification
The 3 months correlation between Spar and BioPorto is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and BioPorto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioPorto 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 BioPorto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioPorto has no effect on the direction of Spar Nord i.e., Spar Nord and BioPorto go up and down completely randomly.
Pair Corralation between Spar Nord and BioPorto
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 0.67 times more return on investment than BioPorto. However, Spar Nord Bank is 1.49 times less risky than BioPorto. It trades about 0.19 of its potential returns per unit of risk. BioPorto is currently generating about -0.47 per unit of risk. If you would invest 13,260 in Spar Nord Bank on September 3, 2024 and sell it today you would earn a total of 660.00 from holding Spar Nord Bank or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. BioPorto
Performance |
| Timeline |
| Spar Nord Bank |
| BioPorto |
Spar Nord and BioPorto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and BioPorto
The main advantage of trading using opposite Spar Nord and BioPorto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, BioPorto 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 BioPorto will offset losses from the drop in BioPorto's long position.| Spar Nord vs. FLSmidth Co | Spar Nord vs. Danske Bank AS | Spar Nord vs. ISS AS | Spar Nord vs. DSV Panalpina AS |
| BioPorto vs. Ambu AS | BioPorto vs. Bavarian Nordic | BioPorto vs. Zealand Pharma AS | BioPorto vs. Orphazyme 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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