Correlation Between Spar Nord and Hvidbjerg Bank
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Hvidbjerg 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 Hvidbjerg 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 Hvidbjerg Bank, you can compare the effects of market volatilities on Spar Nord and Hvidbjerg 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 Hvidbjerg Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Hvidbjerg Bank.
Diversification Opportunities for Spar Nord and Hvidbjerg Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spar and Hvidbjerg is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Hvidbjerg Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hvidbjerg 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 Hvidbjerg Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hvidbjerg Bank has no effect on the direction of Spar Nord i.e., Spar Nord and Hvidbjerg Bank go up and down completely randomly.
Pair Corralation between Spar Nord and Hvidbjerg Bank
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 0.15 times more return on investment than Hvidbjerg Bank. However, Spar Nord Bank is 6.75 times less risky than Hvidbjerg Bank. It trades about 0.1 of its potential returns per unit of risk. Hvidbjerg Bank is currently generating about 0.01 per unit of risk. If you would invest 20,750 in Spar Nord Bank on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Spar Nord Bank or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Spar Nord Bank vs. Hvidbjerg Bank
Performance |
| Timeline |
| Spar Nord Bank |
| Hvidbjerg Bank |
Spar Nord and Hvidbjerg Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Hvidbjerg Bank
The main advantage of trading using opposite Spar Nord and Hvidbjerg Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Hvidbjerg 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 Hvidbjerg Bank will offset losses from the drop in Hvidbjerg 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 |
| Hvidbjerg Bank vs. Skjern Bank AS | Hvidbjerg Bank vs. Lollands Bank | Hvidbjerg Bank vs. Djurslands Bank | Hvidbjerg Bank vs. Nordfyns 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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