Correlation Between Aurskog Sparebank and Sparebank
Can any of the company-specific risk be diversified away by investing in both Aurskog Sparebank 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 Aurskog Sparebank and 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 Sparebank 1 SMN, you can compare the effects of market volatilities on Aurskog Sparebank 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 Aurskog Sparebank with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurskog Sparebank and Sparebank.
Diversification Opportunities for Aurskog Sparebank and Sparebank
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurskog and Sparebank is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aurskog Sparebank and Sparebank 1 SMN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SMN 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 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 SMN has no effect on the direction of Aurskog Sparebank i.e., Aurskog Sparebank and Sparebank go up and down completely randomly.
Pair Corralation between Aurskog Sparebank and Sparebank
Assuming the 90 days trading horizon Aurskog Sparebank is expected to generate 1.06 times more return on investment than Sparebank. However, Aurskog Sparebank is 1.06 times more volatile than Sparebank 1 SMN. It trades about 0.06 of its potential returns per unit of risk. Sparebank 1 SMN is currently generating about -0.03 per unit of risk. If you would invest 23,300 in Aurskog Sparebank on August 29, 2024 and sell it today you would earn a total of 295.00 from holding Aurskog Sparebank or generate 1.27% 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. Sparebank 1 SMN
Performance |
| Timeline |
| Aurskog Sparebank |
| Sparebank 1 SMN |
Aurskog Sparebank and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurskog Sparebank and Sparebank
The main advantage of trading using opposite Aurskog Sparebank and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurskog Sparebank 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.The idea behind Aurskog Sparebank and Sparebank 1 SMN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sparebank vs. Sparebank 1 Nord Norge | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |