Correlation Between Spar Nord and Royal Unibrew
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Royal Unibrew 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 Royal Unibrew 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 Royal Unibrew AS, you can compare the effects of market volatilities on Spar Nord and Royal Unibrew 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 Royal Unibrew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Royal Unibrew.
Diversification Opportunities for Spar Nord and Royal Unibrew
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spar and Royal is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Royal Unibrew AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Unibrew 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 Royal Unibrew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Unibrew AS has no effect on the direction of Spar Nord i.e., Spar Nord and Royal Unibrew go up and down completely randomly.
Pair Corralation between Spar Nord and Royal Unibrew
Assuming the 90 days trading horizon Spar Nord is expected to generate 14.56 times less return on investment than Royal Unibrew. But when comparing it to its historical volatility, Spar Nord Bank is 5.33 times less risky than Royal Unibrew. It trades about 0.09 of its potential returns per unit of risk. Royal Unibrew AS is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 48,900 in Royal Unibrew AS on December 11, 2024 and sell it today you would earn a total of 7,250 from holding Royal Unibrew AS or generate 14.83% 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. Royal Unibrew AS
Performance |
| Timeline |
| Spar Nord Bank |
| Royal Unibrew AS |
Spar Nord and Royal Unibrew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Royal Unibrew
The main advantage of trading using opposite Spar Nord and Royal Unibrew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Royal Unibrew 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 Royal Unibrew will offset losses from the drop in Royal Unibrew'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 |
| Royal Unibrew vs. ROCKWOOL International AS | Royal Unibrew vs. Tryg AS | Royal Unibrew vs. DSV Panalpina AS | Royal Unibrew vs. GN Store Nord |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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