Correlation Between Sparekassen Sjaelland and DSV Panalpina

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

By analyzing existing cross correlation between Sparekassen Sjaelland Fyn AS and DSV Panalpina AS, you can compare the effects of market volatilities on Sparekassen Sjaelland and DSV Panalpina 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 Sparekassen Sjaelland with a short position of DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparekassen Sjaelland and DSV Panalpina.

Diversification Opportunities for Sparekassen Sjaelland and DSV Panalpina

-0.56

Correlation Coefficient

Sparekassen Sjaelland  DSV Panalpina

Excellent diversification

The 3 months correlation between Sparekassen and DSV is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sparekassen Sjaelland Fyn AS and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS and Sparekassen Sjaelland 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 Sparekassen Sjaelland Fyn AS are associated (or correlated) with DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of Sparekassen Sjaelland i.e., Sparekassen Sjaelland and DSV Panalpina go up and down completely randomly.

Pair Corralation between Sparekassen Sjaelland and DSV Panalpina

Assuming the 90 days trading horizon Sparekassen Sjaelland Fyn AS is expected to generate 0.94 times more return on investment than DSV Panalpina. However, Sparekassen Sjaelland Fyn AS is 1.06 times less risky than DSV Panalpina. It trades about 0.14 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.12 per unit of risk. If you would invest  24,950  in Sparekassen Sjaelland Fyn AS on December 29, 2024 and sell it today you would earn a total of  3,100  from holding Sparekassen Sjaelland Fyn AS or generate 12.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Sparekassen Sjaelland Fyn AS  vs.  DSV Panalpina AS

Sparekassen Sjaelland

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sparekassen Sjaelland Fyn AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward-looking signals, Sparekassen Sjaelland may actually be approaching a critical reversion point that can send shares even higher in April 2025.

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Sparekassen Sjaelland and DSV Panalpina

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

The idea behind Sparekassen Sjaelland Fyn AS and DSV Panalpina 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.