Correlation Between Aurskog Sparebank and North Energy
Can any of the company-specific risk be diversified away by investing in both Aurskog Sparebank and North Energy 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 North Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurskog Sparebank and North Energy ASA, you can compare the effects of market volatilities on Aurskog Sparebank and North Energy 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 North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurskog Sparebank and North Energy.
Diversification Opportunities for Aurskog Sparebank and North Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurskog and North is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aurskog Sparebank and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy 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 North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Aurskog Sparebank i.e., Aurskog Sparebank and North Energy go up and down completely randomly.
Pair Corralation between Aurskog Sparebank and North Energy
Assuming the 90 days trading horizon Aurskog Sparebank is expected to under-perform the North Energy. But the stock apears to be less risky and, when comparing its historical volatility, Aurskog Sparebank is 1.54 times less risky than North Energy. The stock trades about -0.03 of its potential returns per unit of risk. The North Energy ASA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 265.00 in North Energy ASA on September 1, 2024 and sell it today you would earn a total of 5.00 from holding North Energy ASA or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aurskog Sparebank vs. North Energy ASA
Performance |
| Timeline |
| Aurskog Sparebank |
| North Energy ASA |
Aurskog Sparebank and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurskog Sparebank and North Energy
The main advantage of trading using opposite Aurskog Sparebank and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurskog Sparebank position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy's long position.| Aurskog Sparebank vs. Melhus Sparebank | Aurskog Sparebank vs. Holand og Setskog | Aurskog Sparebank vs. Helgeland Sparebank |
| North Energy vs. Skue Sparebank | North Energy vs. Aasen Sparebank | North Energy vs. Proximar Seafood AS | North Energy vs. Nidaros Sparebank |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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