Correlation Between Spar Nord and TROPHY GAMES

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

By analyzing existing cross correlation between Spar Nord Bank and TROPHY GAMES Development, you can compare the effects of market volatilities on Spar Nord and TROPHY GAMES 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 Spar Nord with a short position of TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and TROPHY GAMES.

Diversification Opportunities for Spar Nord and TROPHY GAMES

0.48

Correlation Coefficient

Spar Nord  TROPHY GAMES

Very weak diversification

The 3 months correlation between Spar and TROPHY is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank and TROPHY GAMES Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES Development and Spar Nord 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 Spar Nord Bank are associated (or correlated) with TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES Development has no effect on the direction of Spar Nord i.e., Spar Nord and TROPHY GAMES go up and down completely randomly.

Pair Corralation between Spar Nord and TROPHY GAMES

Assuming the 90 days trading horizon Spar Nord is expected to generate 5.76 times less return on investment than TROPHY GAMES. But when comparing it to its historical volatility, Spar Nord Bank is 10.97 times less risky than TROPHY GAMES. It trades about 0.15 of its potential returns per unit of risk. TROPHY GAMES Development is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  600.00  in TROPHY GAMES Development on December 23, 2024 and sell it today you would earn a total of  85.00  from holding TROPHY GAMES Development or generate 14.17% return on investment over 90 days.

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

Spar Nord Bank  vs.  TROPHY GAMES Development

Spar Nord Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spar Nord Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Spar Nord is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TROPHY GAMES Development

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TROPHY GAMES Development are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TROPHY GAMES sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spar Nord and TROPHY GAMES

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

The idea behind Spar Nord Bank and TROPHY GAMES Development 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.