Correlation Between Sparekassen Sjaelland and Best Buy
Can any of the company-specific risk be diversified away by investing in both Sparekassen Sjaelland and Best Buy 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 Sparekassen Sjaelland and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparekassen Sjaelland Fyn AS and Best Buy Co, you can compare the effects of market volatilities on Sparekassen Sjaelland and Best Buy 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 Sparekassen Sjaelland with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparekassen Sjaelland and Best Buy.
Diversification Opportunities for Sparekassen Sjaelland and Best Buy
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sparekassen and Best is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sparekassen Sjaelland Fyn AS and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and Sparekassen Sjaelland 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 Sparekassen Sjaelland Fyn AS are associated (or correlated) with Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of Sparekassen Sjaelland i.e., Sparekassen Sjaelland and Best Buy go up and down completely randomly.
Pair Corralation between Sparekassen Sjaelland and Best Buy
Assuming the 90 days trading horizon Sparekassen Sjaelland Fyn AS is expected to generate 0.88 times more return on investment than Best Buy. However, Sparekassen Sjaelland Fyn AS is 1.13 times less risky than Best Buy. It trades about 0.09 of its potential returns per unit of risk. Best Buy Co is currently generating about -0.22 per unit of risk. If you would invest 21,400 in Sparekassen Sjaelland Fyn AS on January 26, 2024 and sell it today you would earn a total of 450.00 from holding Sparekassen Sjaelland Fyn AS or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Sparekassen Sjaelland Fyn AS vs. Best Buy Co
Performance |
| Timeline |
| Sparekassen Sjaelland |
| Best Buy |
Sparekassen Sjaelland and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparekassen Sjaelland and Best Buy
The main advantage of trading using opposite Sparekassen Sjaelland and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparekassen Sjaelland position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| Sparekassen Sjaelland vs. Sydbank AS | Sparekassen Sjaelland vs. Spar Nord Bank | Sparekassen Sjaelland vs. Per Aarsleff Holding | Sparekassen Sjaelland vs. Vestjysk 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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