Correlation Between Spar Nord and First Farms
Can any of the company-specific risk be diversified away by investing in both Spar Nord and First Farms 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 First Farms 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 First Farms AS, you can compare the effects of market volatilities on Spar Nord and First Farms 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 First Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and First Farms.
Diversification Opportunities for Spar Nord and First Farms
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spar and First is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and First Farms AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Farms 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 First Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Farms AS has no effect on the direction of Spar Nord i.e., Spar Nord and First Farms go up and down completely randomly.
Pair Corralation between Spar Nord and First Farms
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 1.07 times more return on investment than First Farms. However, Spar Nord is 1.07 times more volatile than First Farms AS. It trades about -0.07 of its potential returns per unit of risk. First Farms AS is currently generating about -0.08 per unit of risk. If you would invest 14,000 in Spar Nord Bank on August 25, 2024 and sell it today you would lose (360.00) from holding Spar Nord Bank or give up 2.57% 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. First Farms AS
Performance |
| Timeline |
| Spar Nord Bank |
| First Farms AS |
Spar Nord and First Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and First Farms
The main advantage of trading using opposite Spar Nord and First Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, First Farms 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 First Farms will offset losses from the drop in First Farms' long position.| Spar Nord vs. Sydbank AS | Spar Nord vs. Jyske Bank AS | Spar Nord vs. Alm Brand | Spar Nord vs. Nordea Bank Abp |
| First Farms vs. HH International AS | First Farms vs. SKAKO AS | First Farms vs. Spar Nord Bank | First Farms vs. Matas 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |