Correlation Between Aurskog Sparebank and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both Aurskog 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 Aurskog 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 Aurskog Sparebank and Jaeren Sparebank, you can compare the effects of market volatilities on Aurskog 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 Aurskog Sparebank with a short position of Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurskog Sparebank and Jaeren Sparebank.
Diversification Opportunities for Aurskog Sparebank and Jaeren Sparebank
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurskog and Jaeren is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aurskog Sparebank and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank 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 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 Aurskog Sparebank i.e., Aurskog Sparebank and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between Aurskog Sparebank and Jaeren Sparebank
Assuming the 90 days trading horizon Aurskog Sparebank is expected to generate 1.47 times less return on investment than Jaeren Sparebank. But when comparing it to its historical volatility, Aurskog Sparebank is 1.39 times less risky than Jaeren Sparebank. It trades about 0.08 of its potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 22,938 in Jaeren Sparebank on August 25, 2024 and sell it today you would earn a total of 8,562 from holding Jaeren Sparebank or generate 37.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurskog Sparebank vs. Jaeren Sparebank
Performance |
| Timeline |
| Aurskog Sparebank |
| Jaeren Sparebank |
Aurskog Sparebank and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurskog Sparebank and Jaeren Sparebank
The main advantage of trading using opposite Aurskog Sparebank and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurskog 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.| Aurskog Sparebank vs. Melhus Sparebank | Aurskog Sparebank vs. Holand og Setskog | Aurskog Sparebank vs. Helgeland Sparebank |
| Jaeren Sparebank vs. DnB ASA | Jaeren Sparebank vs. Sparebank 1 SR | Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Sparebanken Mre |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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