Correlation Between Nasdaq and Sparinvest Danske

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

By analyzing existing cross correlation between Nasdaq Inc and Sparinvest Danske Aktier, you can compare the effects of market volatilities on Nasdaq and Sparinvest Danske 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 Nasdaq with a short position of Sparinvest Danske. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Sparinvest Danske.

Diversification Opportunities for Nasdaq and Sparinvest Danske

-0.81

Correlation Coefficient

Nasdaq  Sparinvest Danske

Pay attention - limited upside

The 3 months correlation between Nasdaq and Sparinvest is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Sparinvest Danske Aktier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest Danske Aktier and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Sparinvest Danske. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest Danske Aktier has no effect on the direction of Nasdaq i.e., Nasdaq and Sparinvest Danske go up and down completely randomly.

Pair Corralation between Nasdaq and Sparinvest Danske

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 1.25 times more return on investment than Sparinvest Danske. However, Nasdaq is 1.25 times more volatile than Sparinvest Danske Aktier. It trades about 0.17 of its potential returns per unit of risk. Sparinvest Danske Aktier is currently generating about -0.15 per unit of risk. If you would invest  7,308  in Nasdaq Inc on September 14, 2024 and sell it today you would earn a total of  779.00  from holding Nasdaq Inc or generate 10.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.92%
Values	Daily Returns

Nasdaq Inc  vs.  Sparinvest Danske Aktier

Nasdaq Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sparinvest Danske Aktier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparinvest Danske Aktier has generated negative risk-adjusted returns adding no value to fund investors. Despite latest conflicting performance, the Fund's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the fund institutional investors.

Pair Trading with Nasdaq and Sparinvest Danske

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

The idea behind Nasdaq Inc and Sparinvest Danske Aktier 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.