Correlation Between Spar Nord and Freetrailer Group
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Freetrailer Group 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 Freetrailer Group 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 Freetrailer Group AS, you can compare the effects of market volatilities on Spar Nord and Freetrailer Group 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 Freetrailer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Freetrailer Group.
Diversification Opportunities for Spar Nord and Freetrailer Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spar and Freetrailer is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Freetrailer Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freetrailer Group 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 Freetrailer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freetrailer Group has no effect on the direction of Spar Nord i.e., Spar Nord and Freetrailer Group go up and down completely randomly.
Pair Corralation between Spar Nord and Freetrailer Group
Assuming the 90 days trading horizon Spar Nord is expected to generate 1.03 times less return on investment than Freetrailer Group. But when comparing it to its historical volatility, Spar Nord Bank is 1.67 times less risky than Freetrailer Group. It trades about 0.08 of its potential returns per unit of risk. Freetrailer Group AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,350 in Freetrailer Group AS on September 2, 2024 and sell it today you would earn a total of 500.00 from holding Freetrailer Group AS or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Freetrailer Group AS
Performance |
| Timeline |
| Spar Nord Bank |
| Freetrailer Group |
Spar Nord and Freetrailer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Freetrailer Group
The main advantage of trading using opposite Spar Nord and Freetrailer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Freetrailer Group 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 Freetrailer Group will offset losses from the drop in Freetrailer Group'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 |
| Freetrailer Group vs. BankIn Bredygt Klimaakt | Freetrailer Group vs. Moens Bank AS | Freetrailer Group vs. Danske Andelskassers Bank | Freetrailer Group vs. Prime Office 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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