Correlation Between Sparinvest Mellemlange and Sparinvest Danske

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

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

Diversification Opportunities for Sparinvest Mellemlange and Sparinvest Danske

-0.63

Correlation Coefficient

Sparinvest Mellemlange  Sparinvest Danske

Excellent diversification

The 3 months correlation between Sparinvest and Sparinvest is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sparinvest Mellemlange 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 Sparinvest Mellemlange 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 Sparinvest Mellemlange 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 Sparinvest Mellemlange i.e., Sparinvest Mellemlange and Sparinvest Danske go up and down completely randomly.

Pair Corralation between Sparinvest Mellemlange and Sparinvest Danske

Assuming the 90 days trading horizon Sparinvest Mellemlange is expected to generate 0.22 times more return on investment than Sparinvest Danske. However, Sparinvest Mellemlange is 4.63 times less risky than Sparinvest Danske. It trades about 0.1 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  10,075  in Sparinvest Mellemlange on September 15, 2024 and sell it today you would earn a total of  115.00  from holding Sparinvest Mellemlange or generate 1.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sparinvest Mellemlange  vs.  Sparinvest Danske Aktier

Sparinvest Mellemlange

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinvest Mellemlange are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, Sparinvest Mellemlange is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 Sparinvest Mellemlange and Sparinvest Danske

The main advantage of trading using opposite Sparinvest Mellemlange and Sparinvest Danske positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparinvest Mellemlange 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 Sparinvest Mellemlange 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.