Correlation Between Aasen Sparebank and Instabank ASA
Can any of the company-specific risk be diversified away by investing in both Aasen Sparebank and Instabank ASA 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 Aasen Sparebank and Instabank ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aasen Sparebank and Instabank ASA, you can compare the effects of market volatilities on Aasen Sparebank and Instabank ASA 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 Aasen Sparebank with a short position of Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aasen Sparebank and Instabank ASA.
Diversification Opportunities for Aasen Sparebank and Instabank ASA
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aasen and Instabank is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aasen Sparebank and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA and Aasen 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 Aasen Sparebank are associated (or correlated) with Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of Aasen Sparebank i.e., Aasen Sparebank and Instabank ASA go up and down completely randomly.
Pair Corralation between Aasen Sparebank and Instabank ASA
Assuming the 90 days trading horizon Aasen Sparebank is expected to generate 1.15 times more return on investment than Instabank ASA. However, Aasen Sparebank is 1.15 times more volatile than Instabank ASA. It trades about 0.04 of its potential returns per unit of risk. Instabank ASA is currently generating about 0.01 per unit of risk. If you would invest 11,790 in Aasen Sparebank on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Aasen Sparebank or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aasen Sparebank vs. Instabank ASA
Performance |
| Timeline |
| Aasen Sparebank |
| Instabank ASA |
Aasen Sparebank and Instabank ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aasen Sparebank and Instabank ASA
The main advantage of trading using opposite Aasen Sparebank and Instabank ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aasen Sparebank position performs unexpectedly, Instabank ASA 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 Instabank ASA will offset losses from the drop in Instabank ASA's long position.| Aasen Sparebank vs. Grong Sparebank | Aasen Sparebank vs. Melhus Sparebank | Aasen Sparebank vs. Aurskog Sparebank | Aasen Sparebank vs. Sparebanken Ost |
| Instabank ASA vs. Sparebank 1 SMN | Instabank ASA vs. Sparebank 1 Nord Norge | Instabank ASA vs. Sparebanken Vest | Instabank ASA vs. Sparebank 1 Ostfold |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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