Correlation Between Jaeren Sparebank and Byggma
Can any of the company-specific risk be diversified away by investing in both Jaeren Sparebank and Byggma 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 Jaeren Sparebank and Byggma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaeren Sparebank and Byggma, you can compare the effects of market volatilities on Jaeren Sparebank and Byggma 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 Jaeren Sparebank with a short position of Byggma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaeren Sparebank and Byggma.
Diversification Opportunities for Jaeren Sparebank and Byggma
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jaeren and Byggma is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jaeren Sparebank and Byggma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggma and Jaeren Sparebank 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 Jaeren Sparebank are associated (or correlated) with Byggma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggma has no effect on the direction of Jaeren Sparebank i.e., Jaeren Sparebank and Byggma go up and down completely randomly.
Pair Corralation between Jaeren Sparebank and Byggma
Assuming the 90 days trading horizon Jaeren Sparebank is expected to generate 0.38 times more return on investment than Byggma. However, Jaeren Sparebank is 2.62 times less risky than Byggma. It trades about 0.17 of its potential returns per unit of risk. Byggma is currently generating about 0.02 per unit of risk. If you would invest 31,500 in Jaeren Sparebank on September 25, 2024 and sell it today you would earn a total of 1,350 from holding Jaeren Sparebank or generate 4.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Jaeren Sparebank vs. Byggma
Performance |
Timeline |
Jaeren Sparebank |
Byggma |
Jaeren Sparebank and Byggma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jaeren Sparebank and Byggma
The main advantage of trading using opposite Jaeren Sparebank and Byggma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaeren Sparebank position performs unexpectedly, Byggma 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 Byggma will offset losses from the drop in Byggma's long position.Jaeren Sparebank vs. Grong Sparebank | Jaeren Sparebank vs. Melhus Sparebank | Jaeren Sparebank vs. Aurskog Sparebank | Jaeren Sparebank vs. Sparebanken Ost |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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