Correlation Between Sparebank and St Galler
Can any of the company-specific risk be diversified away by investing in both Sparebank and St Galler 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 Sparebank and St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and St Galler Kantonalbank, you can compare the effects of market volatilities on Sparebank and St Galler 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 Sparebank with a short position of St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and St Galler.
Diversification Opportunities for Sparebank and St Galler
Poor diversification
The 3 months correlation between Sparebank and 0QQZ is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and 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 Sparebank 1 SR are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Sparebank i.e., Sparebank and St Galler go up and down completely randomly.
Pair Corralation between Sparebank and St Galler
Assuming the 90 days trading horizon Sparebank 1 SR is expected to under-perform the St Galler. In addition to that, Sparebank is 2.65 times more volatile than St Galler Kantonalbank. It trades about -0.02 of its total potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.03 per unit of volatility. If you would invest 42,300 in St Galler Kantonalbank on September 2, 2024 and sell it today you would earn a total of 150.00 from holding St Galler Kantonalbank or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 SR vs. St Galler Kantonalbank
Performance |
| Timeline |
| Sparebank 1 SR |
| St Galler Kantonalbank |
Sparebank and St Galler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and St Galler
The main advantage of trading using opposite Sparebank and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.| Sparebank vs. Uniper SE | Sparebank vs. Mulberry Group PLC | Sparebank vs. London Security Plc | Sparebank vs. Triad Group PLC |
| St Galler vs. Uniper SE | St Galler vs. Mulberry Group PLC | St Galler vs. London Security Plc | St Galler vs. Triad Group PLC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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