Correlation Between Sparebank and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Sparebank and Batm Advanced 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 Batm Advanced 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 Batm Advanced Communications, you can compare the effects of market volatilities on Sparebank and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Batm Advanced.
Diversification Opportunities for Sparebank and Batm Advanced
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebank and Batm is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Sparebank i.e., Sparebank and Batm Advanced go up and down completely randomly.
Pair Corralation between Sparebank and Batm Advanced
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.35 times more return on investment than Batm Advanced. However, Sparebank 1 SR is 2.85 times less risky than Batm Advanced. It trades about 0.08 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.0 per unit of risk. If you would invest 11,859 in Sparebank 1 SR on September 12, 2024 and sell it today you would earn a total of 2,581 from holding Sparebank 1 SR or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sparebank 1 SR vs. Batm Advanced Communications
Performance |
| Timeline |
| Sparebank 1 SR |
| Batm Advanced Commun |
Sparebank and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Batm Advanced
The main advantage of trading using opposite Sparebank and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| Sparebank vs. Aeorema Communications Plc | Sparebank vs. Premier Foods PLC | Sparebank vs. Aurora Investment Trust | Sparebank vs. Diversified Energy |
| Batm Advanced vs. Home Depot | Batm Advanced vs. Chrysalis Investments | Batm Advanced vs. Neometals | Batm Advanced vs. Coor Service Management |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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