Correlation Between Sparebanken Vest and SpareBank
Can any of the company-specific risk be diversified away by investing in both Sparebanken Vest and SpareBank 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 SpareBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Vest and SpareBank 1 Sr Norge, you can compare the effects of market volatilities on Sparebanken Vest and SpareBank 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 SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Vest and SpareBank.
Diversification Opportunities for Sparebanken Vest and SpareBank
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sparebanken and SpareBank is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Vest and SpareBank 1 Sr Norge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 Sr 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 SpareBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpareBank 1 Sr has no effect on the direction of Sparebanken Vest i.e., Sparebanken Vest and SpareBank go up and down completely randomly.
Pair Corralation between Sparebanken Vest and SpareBank
Assuming the 90 days trading horizon Sparebanken Vest is expected to generate 1.04 times more return on investment than SpareBank. However, Sparebanken Vest is 1.04 times more volatile than SpareBank 1 Sr Norge. It trades about 0.15 of its potential returns per unit of risk. SpareBank 1 Sr Norge is currently generating about 0.11 per unit of risk. If you would invest 12,440 in Sparebanken Vest on September 26, 2024 and sell it today you would earn a total of 1,452 from holding Sparebanken Vest or generate 11.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sparebanken Vest vs. SpareBank 1 Sr Norge
Performance |
Timeline |
Sparebanken Vest |
SpareBank 1 Sr |
Sparebanken Vest and SpareBank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sparebanken Vest and SpareBank
The main advantage of trading using opposite Sparebanken Vest and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Vest position performs unexpectedly, SpareBank 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 SpareBank will offset losses from the drop in SpareBank's long position.Sparebanken Vest vs. Sparebank 1 Nord Norge | Sparebanken Vest vs. Storebrand ASA | Sparebanken Vest vs. Gjensidige Forsikring ASA |
SpareBank vs. Nordic Semiconductor ASA | SpareBank vs. Aurskog Sparebank | SpareBank vs. Lea Bank ASA | SpareBank vs. Odfjell Technology |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |