Correlation Between Spar Nord and Stenocare
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Stenocare 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 Stenocare 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 Stenocare AS, you can compare the effects of market volatilities on Spar Nord and Stenocare 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 Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Stenocare.
Diversification Opportunities for Spar Nord and Stenocare
Excellent diversification
The 3 months correlation between Spar and Stenocare is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare 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 Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of Spar Nord i.e., Spar Nord and Stenocare go up and down completely randomly.
Pair Corralation between Spar Nord and Stenocare
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 0.24 times more return on investment than Stenocare. However, Spar Nord Bank is 4.12 times less risky than Stenocare. It trades about 0.07 of its potential returns per unit of risk. Stenocare AS is currently generating about -0.02 per unit of risk. If you would invest 9,675 in Spar Nord Bank on September 4, 2024 and sell it today you would earn a total of 4,305 from holding Spar Nord Bank or generate 44.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Stenocare AS
Performance |
| Timeline |
| Spar Nord Bank |
| Stenocare AS |
Spar Nord and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Stenocare
The main advantage of trading using opposite Spar Nord and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare'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 |
| Stenocare vs. Bavarian Nordic | Stenocare vs. Investeringsselskabet Luxor AS | Stenocare vs. cBrain AS | Stenocare vs. Fast Ejendom |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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