Correlation Between MT Bank and Sparebank
Can any of the company-specific risk be diversified away by investing in both MT Bank 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 MT Bank and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank Corp and Sparebank 1 SR, you can compare the effects of market volatilities on MT Bank 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 MT Bank with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Sparebank.
Diversification Opportunities for MT Bank and Sparebank
Good diversification
The 3 months correlation between 0JW2 and Sparebank is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and MT Bank 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 MT Bank Corp 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 MT Bank i.e., MT Bank and Sparebank go up and down completely randomly.
Pair Corralation between MT Bank and Sparebank
Assuming the 90 days trading horizon MT Bank is expected to generate 1.12 times less return on investment than Sparebank. In addition to that, MT Bank is 1.65 times more volatile than Sparebank 1 SR. It trades about 0.06 of its total potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.1 per unit of volatility. If you would invest 11,198 in Sparebank 1 SR on January 22, 2025 and sell it today you would earn a total of 5,082 from holding Sparebank 1 SR or generate 45.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.73% |
| Values | Daily Returns |
MT Bank Corp vs. Sparebank 1 SR
Performance |
| Timeline |
| MT Bank Corp |
| Sparebank 1 SR |
MT Bank and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and Sparebank
The main advantage of trading using opposite MT Bank and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank 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.| MT Bank vs. Rockfire Resources plc | MT Bank vs. Ikigai Ventures | MT Bank vs. Falcon Oil Gas | MT Bank vs. Pantheon Resources |
| Sparebank vs. Associated British Foods | Sparebank vs. Accesso Technology Group | Sparebank vs. Axway Software SA | Sparebank vs. Aptitude Software Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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