Correlation Between Storebrand ASA and Odfjell SE
Can any of the company-specific risk be diversified away by investing in both Storebrand ASA and Odfjell SE 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 Storebrand ASA and Odfjell SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Storebrand ASA and Odfjell SE, you can compare the effects of market volatilities on Storebrand ASA and Odfjell SE 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 Storebrand ASA with a short position of Odfjell SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand ASA and Odfjell SE.
Diversification Opportunities for Storebrand ASA and Odfjell SE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Storebrand and Odfjell is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand ASA and Odfjell SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell SE and Storebrand ASA 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 Storebrand ASA are associated (or correlated) with Odfjell SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell SE has no effect on the direction of Storebrand ASA i.e., Storebrand ASA and Odfjell SE go up and down completely randomly.
Pair Corralation between Storebrand ASA and Odfjell SE
Assuming the 90 days trading horizon Storebrand ASA is expected to generate 0.52 times more return on investment than Odfjell SE. However, Storebrand ASA is 1.92 times less risky than Odfjell SE. It trades about 0.04 of its potential returns per unit of risk. Odfjell SE is currently generating about -0.22 per unit of risk. If you would invest 11,790 in Storebrand ASA on September 21, 2024 and sell it today you would earn a total of 320.00 from holding Storebrand ASA or generate 2.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Storebrand ASA vs. Odfjell SE
Performance |
Timeline |
Storebrand ASA |
Odfjell SE |
Storebrand ASA and Odfjell SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Storebrand ASA and Odfjell SE
The main advantage of trading using opposite Storebrand ASA and Odfjell SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storebrand ASA position performs unexpectedly, Odfjell SE 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 Odfjell SE will offset losses from the drop in Odfjell SE's long position.Storebrand ASA vs. Aurskog Sparebank | Storebrand ASA vs. Helgeland Sparebank | Storebrand ASA vs. Kongsberg Gruppen ASA | Storebrand ASA vs. Napatech AS |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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