Correlation Between DSV Panalpina and Laan Spar
Can any of the company-specific risk be diversified away by investing in both DSV Panalpina and Laan Spar 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 DSV Panalpina and Laan Spar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSV Panalpina AS and Laan Spar Bank, you can compare the effects of market volatilities on DSV Panalpina and Laan Spar 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 DSV Panalpina with a short position of Laan Spar. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and Laan Spar.
Diversification Opportunities for DSV Panalpina and Laan Spar
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between DSV and Laan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Laan Spar Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laan Spar Bank and DSV Panalpina 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 DSV Panalpina AS are associated (or correlated) with Laan Spar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laan Spar Bank has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Laan Spar go up and down completely randomly.
Pair Corralation between DSV Panalpina and Laan Spar
Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 0.56 times more return on investment than Laan Spar. However, DSV Panalpina AS is 1.79 times less risky than Laan Spar. It trades about 0.1 of its potential returns per unit of risk. Laan Spar Bank is currently generating about 0.05 per unit of risk. If you would invest 150,800 in DSV Panalpina AS on September 6, 2024 and sell it today you would earn a total of 3,450 from holding DSV Panalpina AS or generate 2.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
DSV Panalpina AS vs. Laan Spar Bank
Performance |
Timeline |
DSV Panalpina AS |
Laan Spar Bank |
DSV Panalpina and Laan Spar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DSV Panalpina and Laan Spar
The main advantage of trading using opposite DSV Panalpina and Laan Spar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSV Panalpina position performs unexpectedly, Laan Spar 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 Laan Spar will offset losses from the drop in Laan Spar's long position.DSV Panalpina vs. Genmab AS | DSV Panalpina vs. Danske Bank AS | DSV Panalpina vs. Ambu AS | DSV Panalpina vs. FLSmidth Co |
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.
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