Correlation Between DKIFO and Spar Nord

Can any of the company-specific risk be diversified away by investing in both DKIFO and Spar Nord 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 DKIFO and Spar Nord into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Investeringsforeningen Danske Invest and Spar Nord Bank, you can compare the effects of market volatilities on DKIFO and Spar Nord 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 DKIFO with a short position of Spar Nord. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKIFO and Spar Nord.

Diversification Opportunities for DKIFO and Spar Nord

0.0

Correlation Coefficient

DKIFO  Spar Nord

Pay attention - limited upside

The 3 months correlation between DKIFO and Spar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and Spar Nord Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spar Nord Bank and DKIFO 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 Investeringsforeningen Danske Invest are associated (or correlated) with Spar Nord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spar Nord Bank has no effect on the direction of DKIFO i.e., DKIFO and Spar Nord go up and down completely randomly.

Pair Corralation between DKIFO and Spar Nord

If you would invest (100.00) in Investeringsforeningen Danske Invest on February 23, 2024 and sell it today you would earn a total of  100.00  from holding Investeringsforeningen Danske Invest or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Investeringsforeningen Danske   vs.  Spar Nord Bank

Investeringsforeningen

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Investeringsforeningen Danske Invest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, DKIFO is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Spar Nord Bank

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spar Nord Bank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Spar Nord displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DKIFO and Spar Nord

The main advantage of trading using opposite DKIFO and Spar Nord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DKIFO position performs unexpectedly, Spar Nord 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 Spar Nord will offset losses from the drop in Spar Nord's long position.

The idea behind Investeringsforeningen Danske Invest and Spar Nord Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.