Correlation Between Aasen Sparebank and Sparebanken Ost
Can any of the company-specific risk be diversified away by investing in both Aasen Sparebank and Sparebanken Ost 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 Sparebanken Ost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aasen Sparebank and Sparebanken Ost, you can compare the effects of market volatilities on Aasen Sparebank and Sparebanken Ost 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 Sparebanken Ost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aasen Sparebank and Sparebanken Ost.
Diversification Opportunities for Aasen Sparebank and Sparebanken Ost
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aasen and Sparebanken is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aasen Sparebank and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost 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 Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Aasen Sparebank i.e., Aasen Sparebank and Sparebanken Ost go up and down completely randomly.
Pair Corralation between Aasen Sparebank and Sparebanken Ost
Assuming the 90 days trading horizon Aasen Sparebank is expected to generate 2.27 times less return on investment than Sparebanken Ost. In addition to that, Aasen Sparebank is 1.12 times more volatile than Sparebanken Ost. It trades about 0.05 of its total potential returns per unit of risk. Sparebanken Ost is currently generating about 0.12 per unit of volatility. If you would invest 5,489 in Sparebanken Ost on August 29, 2024 and sell it today you would earn a total of 1,207 from holding Sparebanken Ost or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aasen Sparebank vs. Sparebanken Ost
Performance |
| Timeline |
| Aasen Sparebank |
| Sparebanken Ost |
Aasen Sparebank and Sparebanken Ost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aasen Sparebank and Sparebanken Ost
The main advantage of trading using opposite Aasen Sparebank and Sparebanken Ost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aasen Sparebank position performs unexpectedly, Sparebanken Ost 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 Sparebanken Ost will offset losses from the drop in Sparebanken Ost's long position.| Aasen Sparebank vs. DnB ASA | Aasen Sparebank vs. Sparebank 1 SR | Aasen Sparebank vs. Sparebank 1 SMN | Aasen Sparebank vs. Sparebanken Mre |
| Sparebanken Ost vs. Norwegian Air Shuttle | Sparebanken Ost vs. Arcticzymes Technologies ASA | Sparebanken Ost vs. Odfjell Technology | Sparebanken Ost vs. Sea1 Offshore |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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