Correlation Between Spar Nord and Carnegie Wealth
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Carnegie Wealth 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 Carnegie Wealth 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 Carnegie Wealth Management, you can compare the effects of market volatilities on Spar Nord and Carnegie Wealth 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 Carnegie Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Carnegie Wealth.
Diversification Opportunities for Spar Nord and Carnegie Wealth
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spar and Carnegie is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Carnegie Wealth Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Wealth Mana 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 Carnegie Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Wealth Mana has no effect on the direction of Spar Nord i.e., Spar Nord and Carnegie Wealth go up and down completely randomly.
Pair Corralation between Spar Nord and Carnegie Wealth
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 1.42 times more return on investment than Carnegie Wealth. However, Spar Nord is 1.42 times more volatile than Carnegie Wealth Management. It trades about -0.02 of its potential returns per unit of risk. Carnegie Wealth Management is currently generating about -0.13 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Carnegie Wealth Management
Performance |
| Timeline |
| Spar Nord Bank |
| Carnegie Wealth Mana |
Spar Nord and Carnegie Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Carnegie Wealth
The main advantage of trading using opposite Spar Nord and Carnegie Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Carnegie Wealth 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 Carnegie Wealth will offset losses from the drop in Carnegie Wealth'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 |
| Carnegie Wealth vs. Novo Nordisk AS | Carnegie Wealth vs. Nordea Bank Abp | Carnegie Wealth vs. DSV Panalpina AS | Carnegie Wealth vs. AP Mller |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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