Correlation Between Aurskog Sparebank and Bien Sparebank
Can any of the company-specific risk be diversified away by investing in both Aurskog Sparebank and Bien 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 Aurskog Sparebank and Bien Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurskog Sparebank and Bien Sparebank ASA, you can compare the effects of market volatilities on Aurskog Sparebank and Bien 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 Aurskog Sparebank with a short position of Bien Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurskog Sparebank and Bien Sparebank.
Diversification Opportunities for Aurskog Sparebank and Bien Sparebank
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurskog and Bien is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aurskog Sparebank and Bien Sparebank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bien Sparebank ASA and Aurskog 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 Aurskog Sparebank are associated (or correlated) with Bien Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bien Sparebank ASA has no effect on the direction of Aurskog Sparebank i.e., Aurskog Sparebank and Bien Sparebank go up and down completely randomly.
Pair Corralation between Aurskog Sparebank and Bien Sparebank
Assuming the 90 days trading horizon Aurskog Sparebank is expected to generate 2.53 times less return on investment than Bien Sparebank. But when comparing it to its historical volatility, Aurskog Sparebank is 1.42 times less risky than Bien Sparebank. It trades about 0.05 of its potential returns per unit of risk. Bien Sparebank ASA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,178 in Bien Sparebank ASA on September 12, 2024 and sell it today you would earn a total of 4,222 from holding Bien Sparebank ASA or generate 51.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurskog Sparebank vs. Bien Sparebank ASA
Performance |
| Timeline |
| Aurskog Sparebank |
| Bien Sparebank ASA |
Aurskog Sparebank and Bien Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurskog Sparebank and Bien Sparebank
The main advantage of trading using opposite Aurskog Sparebank and Bien Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurskog Sparebank position performs unexpectedly, Bien 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 Bien Sparebank will offset losses from the drop in Bien Sparebank's long position.| Aurskog Sparebank vs. Helgeland Sparebank | Aurskog Sparebank vs. Kongsberg Gruppen ASA | Aurskog Sparebank vs. Napatech AS | Aurskog Sparebank vs. Elkem ASA |
| Bien Sparebank vs. Lea Bank ASA | Bien Sparebank vs. Romerike Sparebank | Bien Sparebank vs. Kongsberg Gruppen ASA | Bien Sparebank vs. Napatech AS |
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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