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 Nord Norge, 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
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurskog and Sparebank is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aurskog Sparebank and Sparebank 1 Nord Norge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 Nord 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 Nord 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 1.68 times less return on investment than Sparebank. But when comparing it to its historical volatility, Aurskog Sparebank is 1.16 times less risky than Sparebank. It trades about 0.06 of its potential returns per unit of risk. Sparebank 1 Nord Norge is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,275 in Sparebank 1 Nord Norge on September 14, 2024 and sell it today you would earn a total of 2,703 from holding Sparebank 1 Nord Norge or generate 29.14% 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 Nord Norge
Performance |
| Timeline |
| Aurskog Sparebank |
| Sparebank 1 Nord |
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.| Aurskog Sparebank vs. Helgeland Sparebank | Aurskog Sparebank vs. Kongsberg Gruppen ASA | Aurskog Sparebank vs. Napatech AS | Aurskog Sparebank vs. Elkem ASA |
| Sparebank vs. Sparebank 1 SMN | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. SpareBank 1 stlandet |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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