Correlation Between Sparebanken Vest and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both Sparebanken Vest and AcadeMedia 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 AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Vest and AcadeMedia AB, you can compare the effects of market volatilities on Sparebanken Vest and AcadeMedia 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 AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Vest and AcadeMedia.
Diversification Opportunities for Sparebanken Vest and AcadeMedia
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sparebanken and AcadeMedia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Vest and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB 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 AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Sparebanken Vest i.e., Sparebanken Vest and AcadeMedia go up and down completely randomly.
Pair Corralation between Sparebanken Vest and AcadeMedia
Assuming the 90 days trading horizon Sparebanken Vest is expected to generate 1.05 times more return on investment than AcadeMedia. However, Sparebanken Vest is 1.05 times more volatile than AcadeMedia AB. It trades about 0.33 of its potential returns per unit of risk. AcadeMedia AB is currently generating about 0.1 per unit of risk. If you would invest 13,000 in Sparebanken Vest on October 11, 2024 and sell it today you would earn a total of 1,180 from holding Sparebanken Vest or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebanken Vest vs. AcadeMedia AB
Performance |
| Timeline |
| Sparebanken Vest |
| AcadeMedia AB |
Sparebanken Vest and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Vest and AcadeMedia
The main advantage of trading using opposite Sparebanken Vest and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Vest position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.| Sparebanken Vest vs. Trellus Health plc | Sparebanken Vest vs. Cardinal Health | Sparebanken Vest vs. Eco Animal Health | Sparebanken Vest vs. Future Metals NL |
| AcadeMedia vs. JLEN Environmental Assets | AcadeMedia vs. Mindflair Plc | AcadeMedia vs. Ironveld Plc | AcadeMedia vs. Kaufman Et Broad |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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