Correlation Between DSV Panalpina and Sparekassen Sjaelland

Can any of the company-specific risk be diversified away by investing in both DSV Panalpina and Sparekassen Sjaelland 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 Sparekassen Sjaelland 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 Sparekassen Sjaelland Fyn AS, you can compare the effects of market volatilities on DSV Panalpina and Sparekassen Sjaelland 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 Sparekassen Sjaelland. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and Sparekassen Sjaelland.

Diversification Opportunities for DSV Panalpina and Sparekassen Sjaelland

-0.28

Correlation Coefficient

DSV Panalpina  Sparekassen Sjaelland

Very good diversification

The 3 months correlation between DSV and Sparekassen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Sparekassen Sjaelland Fyn AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparekassen Sjaelland 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 Sparekassen Sjaelland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparekassen Sjaelland has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Sparekassen Sjaelland go up and down completely randomly.

Pair Corralation between DSV Panalpina and Sparekassen Sjaelland

Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 2.33 times more return on investment than Sparekassen Sjaelland. However, DSV Panalpina is 2.33 times more volatile than Sparekassen Sjaelland Fyn AS. It trades about 0.2 of its potential returns per unit of risk. Sparekassen Sjaelland Fyn AS is currently generating about 0.0 per unit of risk. If you would invest  122,500  in DSV Panalpina AS on September 4, 2024 and sell it today you would earn a total of  31,150  from holding DSV Panalpina AS or generate 25.43% return on investment over 90 days.

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

DSV Panalpina AS  vs.  Sparekassen Sjaelland Fyn AS

DSV Panalpina AS

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DSV Panalpina displayed solid returns over the last few months and may actually be approaching a breakup point.

Sparekassen Sjaelland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparekassen Sjaelland Fyn AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Sparekassen Sjaelland is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DSV Panalpina and Sparekassen Sjaelland

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

The idea behind DSV Panalpina AS and Sparekassen Sjaelland Fyn AS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.