Correlation Between Sparebank and Hofseth Biocare
Can any of the company-specific risk be diversified away by investing in both Sparebank and Hofseth Biocare 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 Sparebank and Hofseth Biocare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Hofseth Biocare ASA, you can compare the effects of market volatilities on Sparebank and Hofseth Biocare 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 Sparebank with a short position of Hofseth Biocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Hofseth Biocare.
Diversification Opportunities for Sparebank and Hofseth Biocare
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebank and Hofseth is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Hofseth Biocare ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hofseth Biocare ASA and 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 Sparebank 1 SR are associated (or correlated) with Hofseth Biocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hofseth Biocare ASA has no effect on the direction of Sparebank i.e., Sparebank and Hofseth Biocare go up and down completely randomly.
Pair Corralation between Sparebank and Hofseth Biocare
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.29 times more return on investment than Hofseth Biocare. However, Sparebank 1 SR is 3.48 times less risky than Hofseth Biocare. It trades about 0.13 of its potential returns per unit of risk. Hofseth Biocare ASA is currently generating about -0.15 per unit of risk. If you would invest 13,200 in Sparebank 1 SR on September 4, 2024 and sell it today you would earn a total of 1,240 from holding Sparebank 1 SR or generate 9.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Sparebank 1 SR vs. Hofseth Biocare ASA
Performance |
Timeline |
Sparebank 1 SR |
Hofseth Biocare ASA |
Sparebank and Hofseth Biocare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sparebank and Hofseth Biocare
The main advantage of trading using opposite Sparebank and Hofseth Biocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Hofseth Biocare 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 Hofseth Biocare will offset losses from the drop in Hofseth Biocare's long position.Sparebank vs. Sparebank 1 SMN | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA | Sparebank vs. Sparebank 1 Nord Norge |
Hofseth Biocare vs. Carasent ASA | Hofseth Biocare vs. Bergenbio ASA | Hofseth Biocare vs. Photocure | Hofseth Biocare vs. Kitron ASA |
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.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Transaction History View history of all your transactions and understand their impact on performance |