Correlation Between Sparebanken Vest and Byggma
Can any of the company-specific risk be diversified away by investing in both Sparebanken Vest 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 Sparebanken Vest and Byggma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Vest and Byggma, you can compare the effects of market volatilities on Sparebanken Vest 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 Sparebanken Vest with a short position of Byggma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Vest and Byggma.
Diversification Opportunities for Sparebanken Vest and Byggma
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sparebanken and Byggma is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Vest and Byggma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggma and Sparebanken Vest 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 Sparebanken Vest 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 Sparebanken Vest i.e., Sparebanken Vest and Byggma go up and down completely randomly.
Pair Corralation between Sparebanken Vest and Byggma
Assuming the 90 days trading horizon Sparebanken Vest is expected to generate 0.35 times more return on investment than Byggma. However, Sparebanken Vest is 2.84 times less risky than Byggma. It trades about 0.17 of its potential returns per unit of risk. Byggma is currently generating about -0.07 per unit of risk. If you would invest 12,312 in Sparebanken Vest on September 25, 2024 and sell it today you would earn a total of 1,580 from holding Sparebanken Vest or generate 12.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Sparebanken Vest vs. Byggma
Performance |
Timeline |
Sparebanken Vest |
Byggma |
Sparebanken Vest and Byggma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sparebanken Vest and Byggma
The main advantage of trading using opposite Sparebanken Vest and Byggma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Vest 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.Sparebanken Vest vs. Sparebank 1 Nord Norge | Sparebanken Vest vs. Storebrand ASA | Sparebanken Vest vs. DnB ASA | Sparebanken Vest vs. Gjensidige Forsikring ASA |
Byggma vs. AF Gruppen ASA | Byggma vs. American Shipping | Byggma vs. Arendals Fossekompani ASA | Byggma vs. Kid 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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