Correlation Between Laan Spar and Alm Brand
Can any of the company-specific risk be diversified away by investing in both Laan Spar and Alm Brand 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 Laan Spar and Alm Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laan Spar Bank and Alm Brand, you can compare the effects of market volatilities on Laan Spar and Alm Brand 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 Laan Spar with a short position of Alm Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laan Spar and Alm Brand.
Diversification Opportunities for Laan Spar and Alm Brand
Good diversification
The 3 months correlation between Laan and Alm is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Laan Spar Bank and Alm Brand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alm Brand and Laan Spar 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 Laan Spar Bank are associated (or correlated) with Alm Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alm Brand has no effect on the direction of Laan Spar i.e., Laan Spar and Alm Brand go up and down completely randomly.
Pair Corralation between Laan Spar and Alm Brand
Assuming the 90 days trading horizon Laan Spar Bank is expected to generate 1.5 times more return on investment than Alm Brand. However, Laan Spar is 1.5 times more volatile than Alm Brand. It trades about 0.28 of its potential returns per unit of risk. Alm Brand is currently generating about 0.0 per unit of risk. If you would invest 86,000 in Laan Spar Bank on August 18, 2025 and sell it today you would earn a total of 33,000 from holding Laan Spar Bank or generate 38.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laan Spar Bank vs. Alm Brand
Performance |
| Timeline |
| Laan Spar Bank |
| Alm Brand |
Laan Spar and Alm Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laan Spar and Alm Brand
The main advantage of trading using opposite Laan Spar and Alm Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laan Spar position performs unexpectedly, Alm Brand 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 Alm Brand will offset losses from the drop in Alm Brand's long position.| Laan Spar vs. Danske Andelskassers Bank | Laan Spar vs. Djurslands Bank | Laan Spar vs. Sparekassen Sjaelland Fyn AS | Laan Spar vs. Skjern Bank AS |
| Alm Brand vs. Sydbank AS | Alm Brand vs. Ringkjoebing Landbobank AS | Alm Brand vs. Vestjysk Bank AS | Alm Brand vs. Danske Andelskassers Bank |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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