Correlation Between Spar Nord and Nilfisk Holding
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Nilfisk Holding 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 Nilfisk Holding 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 Nilfisk Holding AS, you can compare the effects of market volatilities on Spar Nord and Nilfisk Holding 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 Nilfisk Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Nilfisk Holding.
Diversification Opportunities for Spar Nord and Nilfisk Holding
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spar and Nilfisk is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Nilfisk Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nilfisk Holding 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 Nilfisk Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nilfisk Holding AS has no effect on the direction of Spar Nord i.e., Spar Nord and Nilfisk Holding go up and down completely randomly.
Pair Corralation between Spar Nord and Nilfisk Holding
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 2.86 times more return on investment than Nilfisk Holding. However, Spar Nord is 2.86 times more volatile than Nilfisk Holding AS. It trades about 0.15 of its potential returns per unit of risk. Nilfisk Holding AS is currently generating about -0.14 per unit of risk. If you would invest 12,760 in Spar Nord Bank on September 12, 2024 and sell it today you would earn a total of 7,740 from holding Spar Nord Bank or generate 60.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Nilfisk Holding AS
Performance |
| Timeline |
| Spar Nord Bank |
| Nilfisk Holding AS |
Spar Nord and Nilfisk Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Nilfisk Holding
The main advantage of trading using opposite Spar Nord and Nilfisk Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Nilfisk Holding 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 Nilfisk Holding will offset losses from the drop in Nilfisk Holding's long position.| Spar Nord vs. FLSmidth Co | Spar Nord vs. Danske Bank AS | Spar Nord vs. ISS AS | Spar Nord vs. DSV Panalpina AS |
| Nilfisk Holding vs. NKT AS | Nilfisk Holding vs. ISS AS | Nilfisk Holding vs. Demant AS | Nilfisk Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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