Correlation Between Sparinv SICAV and Maj Invest

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

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

Diversification Opportunities for Sparinv SICAV and Maj Invest

-0.13

Correlation Coefficient

Sparinv SICAV  Maj Invest

Good diversification

The 3 months correlation between Sparinv and Maj is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sparinv SICAV and Maj Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest and Sparinv SICAV 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 Sparinv SICAV are associated (or correlated) with Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest has no effect on the direction of Sparinv SICAV i.e., Sparinv SICAV and Maj Invest go up and down completely randomly.

Pair Corralation between Sparinv SICAV and Maj Invest

Assuming the 90 days trading horizon Sparinv SICAV is expected to generate 2.29 times more return on investment than Maj Invest. However, Sparinv SICAV is 2.29 times more volatile than Maj Invest . It trades about 0.05 of its potential returns per unit of risk. Maj Invest is currently generating about -0.11 per unit of risk. If you would invest  28,560  in Sparinv SICAV on December 27, 2024 and sell it today you would earn a total of  740.00  from holding Sparinv SICAV or generate 2.59% return on investment over 90 days.

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

Sparinv SICAV  vs.  Maj Invest

Sparinv SICAV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinv SICAV are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Sparinv SICAV is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Maj Invest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maj Invest has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong forward-looking indicators, Maj Invest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sparinv SICAV and Maj Invest

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

The idea behind Sparinv SICAV and Maj Invest 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.