Correlation Between Spar Nord and Fynske Bank
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Fynske 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 Fynske 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 Fynske Bank AS, you can compare the effects of market volatilities on Spar Nord and Fynske 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 Fynske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Fynske Bank.
Diversification Opportunities for Spar Nord and Fynske Bank
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Spar and Fynske is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Fynske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fynske Bank 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 Fynske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fynske Bank AS has no effect on the direction of Spar Nord i.e., Spar Nord and Fynske Bank go up and down completely randomly.
Pair Corralation between Spar Nord and Fynske Bank
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 1.58 times more return on investment than Fynske Bank. However, Spar Nord is 1.58 times more volatile than Fynske Bank AS. It trades about 0.06 of its potential returns per unit of risk. Fynske Bank AS is currently generating about 0.02 per unit of risk. If you would invest 11,569 in Spar Nord Bank on November 27, 2024 and sell it today you would earn a total of 9,281 from holding Spar Nord Bank or generate 80.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Fynske Bank AS
Performance |
| Timeline |
| Spar Nord Bank |
| Fynske Bank AS |
Spar Nord and Fynske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Fynske Bank
The main advantage of trading using opposite Spar Nord and Fynske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Fynske 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 Fynske Bank will offset losses from the drop in Fynske Bank'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 |
| Fynske Bank vs. Skjern Bank AS | Fynske Bank vs. Djurslands Bank | Fynske Bank vs. Sparekassen Sjaelland Fyn AS | Fynske Bank vs. Groenlandsbanken 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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