Correlation Between Sparinvest Europa and DKINYM

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

By analyzing existing cross correlation between Sparinvest Europa Growth and Investeringsforeningen Danske Invest, you can compare the effects of market volatilities on Sparinvest Europa and DKINYM 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 Sparinvest Europa with a short position of DKINYM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparinvest Europa and DKINYM.

Diversification Opportunities for Sparinvest Europa and DKINYM

0.82

Correlation Coefficient

Sparinvest Europa  DKINYM

Very poor diversification

The 3 months correlation between Sparinvest and DKINYM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sparinvest Europa Growth and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen and Sparinvest Europa 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 Sparinvest Europa Growth are associated (or correlated) with DKINYM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Sparinvest Europa i.e., Sparinvest Europa and DKINYM go up and down completely randomly.

Pair Corralation between Sparinvest Europa and DKINYM

Assuming the 90 days trading horizon Sparinvest Europa Growth is expected to generate 0.85 times more return on investment than DKINYM. However, Sparinvest Europa Growth is 1.17 times less risky than DKINYM. It trades about 0.05 of its potential returns per unit of risk. Investeringsforeningen Danske Invest is currently generating about 0.04 per unit of risk. If you would invest  14,482  in Sparinvest Europa Growth on March 30, 2025 and sell it today you would earn a total of  513.00  from holding Sparinvest Europa Growth or generate 3.54% return on investment over 90 days.

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

Sparinvest Europa Growth  vs.  Investeringsforeningen Danske

Sparinvest Europa Growth

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinvest Europa Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, Sparinvest Europa is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Investeringsforeningen

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong forward indicators, DKINYM is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sparinvest Europa and DKINYM

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

The idea behind Sparinvest Europa Growth and Investeringsforeningen Danske 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.