Correlation Between Spar Nord and Djurslands Bank
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Djurslands 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 Spar Nord and Djurslands Bank 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 Djurslands Bank, you can compare the effects of market volatilities on Spar Nord and Djurslands 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 Spar Nord with a short position of Djurslands Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Djurslands Bank.
Diversification Opportunities for Spar Nord and Djurslands Bank
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spar and Djurslands is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Djurslands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djurslands Bank 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 Djurslands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Djurslands Bank has no effect on the direction of Spar Nord i.e., Spar Nord and Djurslands Bank go up and down completely randomly.
Pair Corralation between Spar Nord and Djurslands Bank
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 1.62 times more return on investment than Djurslands Bank. However, Spar Nord is 1.62 times more volatile than Djurslands Bank. It trades about -0.05 of its potential returns per unit of risk. Djurslands Bank is currently generating about -0.09 per unit of risk. If you would invest 13,920 in Spar Nord Bank on August 26, 2024 and sell it today you would lose (280.00) from holding Spar Nord Bank or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Djurslands Bank
Performance |
| Timeline |
| Spar Nord Bank |
| Djurslands Bank |
Spar Nord and Djurslands Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Djurslands Bank
The main advantage of trading using opposite Spar Nord and Djurslands Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Djurslands 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 Djurslands Bank will offset losses from the drop in Djurslands Bank's long position.| Spar Nord vs. Dataproces Group AS | Spar Nord vs. cBrain AS | Spar Nord vs. ALK Abell AS | Spar Nord vs. ChemoMetec AS |
| Djurslands Bank vs. Skjern Bank AS | Djurslands Bank vs. Lollands Bank | Djurslands Bank vs. Kreditbanken AS | Djurslands Bank vs. Fynske Bank 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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