Correlation Between Laan Spar and Scandinavian Medical
Can any of the company-specific risk be diversified away by investing in both Laan Spar and Scandinavian Medical 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 Scandinavian Medical 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 Scandinavian Medical Solutions, you can compare the effects of market volatilities on Laan Spar and Scandinavian Medical 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 Scandinavian Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laan Spar and Scandinavian Medical.
Diversification Opportunities for Laan Spar and Scandinavian Medical
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Laan and Scandinavian is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Laan Spar Bank and Scandinavian Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Medical 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 Scandinavian Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Medical has no effect on the direction of Laan Spar i.e., Laan Spar and Scandinavian Medical go up and down completely randomly.
Pair Corralation between Laan Spar and Scandinavian Medical
Assuming the 90 days trading horizon Laan Spar Bank is expected to generate 0.66 times more return on investment than Scandinavian Medical. However, Laan Spar Bank is 1.53 times less risky than Scandinavian Medical. It trades about 0.19 of its potential returns per unit of risk. Scandinavian Medical Solutions is currently generating about -0.03 per unit of risk. If you would invest 89,500 in Laan Spar Bank on August 30, 2025 and sell it today you would earn a total of 23,500 from holding Laan Spar Bank or generate 26.26% 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. Scandinavian Medical Solutions
Performance |
| Timeline |
| Laan Spar Bank |
| Scandinavian Medical |
Laan Spar and Scandinavian Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laan Spar and Scandinavian Medical
The main advantage of trading using opposite Laan Spar and Scandinavian Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laan Spar position performs unexpectedly, Scandinavian Medical 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 Scandinavian Medical will offset losses from the drop in Scandinavian Medical's long position.| Laan Spar vs. Danske Andelskassers Bank | Laan Spar vs. Skjern Bank AS | Laan Spar vs. Vestjysk Bank AS | Laan Spar vs. Moens Bank AS |
| Scandinavian Medical vs. North Media AS | Scandinavian Medical vs. Nordfyns Bank AS | Scandinavian Medical vs. Scandinavian Investment Group | Scandinavian Medical vs. Ress Life Investments |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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