Correlation Between Aasen Sparebank and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both Aasen Sparebank and Jaeren 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 Aasen Sparebank and Jaeren Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aasen Sparebank and Jaeren Sparebank, you can compare the effects of market volatilities on Aasen Sparebank and Jaeren 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 Aasen Sparebank with a short position of Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aasen Sparebank and Jaeren Sparebank.
Diversification Opportunities for Aasen Sparebank and Jaeren Sparebank
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aasen and Jaeren is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aasen Sparebank and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank 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 Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of Aasen Sparebank i.e., Aasen Sparebank and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between Aasen Sparebank and Jaeren Sparebank
Assuming the 90 days trading horizon Aasen Sparebank is expected to generate 2.61 times less return on investment than Jaeren Sparebank. In addition to that, Aasen Sparebank is 1.07 times more volatile than Jaeren Sparebank. It trades about 0.03 of its total potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.07 per unit of volatility. If you would invest 22,562 in Jaeren Sparebank on August 31, 2024 and sell it today you would earn a total of 9,328 from holding Jaeren Sparebank or generate 41.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aasen Sparebank vs. Jaeren Sparebank
Performance |
| Timeline |
| Aasen Sparebank |
| Jaeren Sparebank |
Aasen Sparebank and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aasen Sparebank and Jaeren Sparebank
The main advantage of trading using opposite Aasen Sparebank and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aasen Sparebank position performs unexpectedly, Jaeren 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank's long position.| Aasen Sparebank vs. Sparebank 1 SMN | Aasen Sparebank vs. Sparebank 1 Nord Norge | Aasen Sparebank vs. Sparebanken Vest | Aasen Sparebank vs. Sparebank 1 Ostfold |
| Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Sparebank 1 Nord Norge | Jaeren Sparebank vs. Sparebanken Vest | Jaeren Sparebank 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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