Correlation Between Spar Nord and Vestjysk Bank
Can any of the company-specific risk be diversified away by investing in both Spar Nord and Vestjysk 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 Vestjysk 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 Vestjysk Bank AS, you can compare the effects of market volatilities on Spar Nord and Vestjysk 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 Vestjysk Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Vestjysk Bank.
Diversification Opportunities for Spar Nord and Vestjysk Bank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spar and Vestjysk is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and Vestjysk Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestjysk 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 Vestjysk Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestjysk Bank AS has no effect on the direction of Spar Nord i.e., Spar Nord and Vestjysk Bank go up and down completely randomly.
Pair Corralation between Spar Nord and Vestjysk Bank
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 1.35 times more return on investment than Vestjysk Bank. However, Spar Nord is 1.35 times more volatile than Vestjysk Bank AS. It trades about 0.06 of its potential returns per unit of risk. Vestjysk Bank AS is currently generating about 0.06 per unit of risk. If you would invest 9,202 in Spar Nord Bank on August 26, 2024 and sell it today you would earn a total of 4,438 from holding Spar Nord Bank or generate 48.23% 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. Vestjysk Bank AS
Performance |
| Timeline |
| Spar Nord Bank |
| Vestjysk Bank AS |
Spar Nord and Vestjysk Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Vestjysk Bank
The main advantage of trading using opposite Spar Nord and Vestjysk Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord position performs unexpectedly, Vestjysk 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 Vestjysk Bank will offset losses from the drop in Vestjysk Bank's long position.| Spar Nord vs. Dataproces Group AS | Spar Nord vs. cBrain AS | Spar Nord vs. ALK Abell AS | Spar Nord vs. ChemoMetec AS |
| Vestjysk Bank vs. Dataproces Group AS | Vestjysk Bank vs. cBrain AS | Vestjysk Bank vs. ALK Abell AS | Vestjysk Bank vs. ChemoMetec 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |