Correlation Between Sunndal Sparebank and Teco 2030

Can any of the company-specific risk be diversified away by investing in both Sunndal Sparebank and Teco 2030 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 Sunndal Sparebank and Teco 2030 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunndal Sparebank and Teco 2030 Asa, you can compare the effects of market volatilities on Sunndal Sparebank and Teco 2030 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 Sunndal Sparebank with a short position of Teco 2030. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunndal Sparebank and Teco 2030.

Diversification Opportunities for Sunndal Sparebank and Teco 2030

-0.65

Correlation Coefficient

Sunndal Sparebank  Teco 2030

Excellent diversification

The 3 months correlation between Sunndal and Teco is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sunndal Sparebank and Teco 2030 Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teco 2030 Asa and Sunndal 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 Sunndal Sparebank are associated (or correlated) with Teco 2030. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teco 2030 Asa has no effect on the direction of Sunndal Sparebank i.e., Sunndal Sparebank and Teco 2030 go up and down completely randomly.

Pair Corralation between Sunndal Sparebank and Teco 2030

Assuming the 90 days trading horizon Sunndal Sparebank is expected to generate 0.13 times more return on investment than Teco 2030. However, Sunndal Sparebank is 7.61 times less risky than Teco 2030. It trades about 0.03 of its potential returns per unit of risk. Teco 2030 Asa is currently generating about -0.03 per unit of risk. If you would invest  10,504  in Sunndal Sparebank on September 14, 2024 and sell it today you would earn a total of  1,776  from holding Sunndal Sparebank or generate 16.91% return on investment over 90 days.

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

Sunndal Sparebank  vs.  Teco 2030 Asa

Sunndal Sparebank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sunndal Sparebank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Sunndal Sparebank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Teco 2030 Asa

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teco 2030 Asa are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Teco 2030 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunndal Sparebank and Teco 2030

The main advantage of trading using opposite Sunndal Sparebank and Teco 2030 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunndal Sparebank position performs unexpectedly, Teco 2030 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 Teco 2030 will offset losses from the drop in Teco 2030's long position.

The idea behind Sunndal Sparebank and Teco 2030 Asa 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.