Correlation Between Aurora Investment and Sparebank
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and 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 Aurora Investment and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Investment Trust and Sparebank 1 SR, you can compare the effects of market volatilities on Aurora Investment and 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 Aurora Investment with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Sparebank.
Diversification Opportunities for Aurora Investment and Sparebank
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurora and Sparebank is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Aurora Investment 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 Aurora Investment Trust are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Aurora Investment i.e., Aurora Investment and Sparebank go up and down completely randomly.
Pair Corralation between Aurora Investment and Sparebank
Assuming the 90 days trading horizon Aurora Investment is expected to generate 1.65 times less return on investment than Sparebank. In addition to that, Aurora Investment is 1.04 times more volatile than Sparebank 1 SR. It trades about 0.03 of its total potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.06 per unit of volatility. If you would invest 12,159 in Sparebank 1 SR on September 12, 2024 and sell it today you would earn a total of 2,441 from holding Sparebank 1 SR or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Aurora Investment Trust vs. Sparebank 1 SR
Performance |
| Timeline |
| Aurora Investment Trust |
| Sparebank 1 SR |
Aurora Investment and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Sparebank
The main advantage of trading using opposite Aurora Investment and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, 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 Sparebank will offset losses from the drop in Sparebank's long position.| Aurora Investment vs. Samsung Electronics Co | Aurora Investment vs. Samsung Electronics Co | Aurora Investment vs. Hyundai Motor | Aurora Investment vs. Toyota Motor Corp |
| Sparebank vs. Aeorema Communications Plc | Sparebank vs. Premier Foods PLC | Sparebank vs. Aurora Investment Trust | Sparebank vs. Diversified Energy |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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