Correlation Between Sparebank and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Sparebank and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on Sparebank and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Advanced Medical.
Diversification Opportunities for Sparebank and Advanced Medical
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sparebank and Advanced is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Sparebank i.e., Sparebank and Advanced Medical go up and down completely randomly.
Pair Corralation between Sparebank and Advanced Medical
Assuming the 90 days trading horizon Sparebank is expected to generate 1.52 times less return on investment than Advanced Medical. But when comparing it to its historical volatility, Sparebank 1 SR is 2.07 times less risky than Advanced Medical. It trades about 0.08 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20,800 in Advanced Medical Solutions on November 27, 2024 and sell it today you would earn a total of 450.00 from holding Advanced Medical Solutions or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 SR vs. Advanced Medical Solutions
Performance |
| Timeline |
| Sparebank 1 SR |
| Advanced Medical Sol |
Sparebank and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Advanced Medical
The main advantage of trading using opposite Sparebank and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| Sparebank vs. Verizon Communications | Sparebank vs. Cairo Communication SpA | Sparebank vs. Livermore Investments Group | Sparebank vs. Bigblu Broadband PLC |
| Advanced Medical vs. International Biotechnology Trust | Advanced Medical vs. Ashtead Technology Holdings | Advanced Medical vs. Clean Power Hydrogen | Advanced Medical vs. Ross Stores |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |