Correlation Between Aurskog Sparebank and Skue Sparebank
Can any of the company-specific risk be diversified away by investing in both Aurskog Sparebank and Skue 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 Skue 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 Skue Sparebank, you can compare the effects of market volatilities on Aurskog Sparebank and Skue 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 Skue Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurskog Sparebank and Skue Sparebank.
Diversification Opportunities for Aurskog Sparebank and Skue Sparebank
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurskog and Skue is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aurskog Sparebank and Skue Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skue 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 Skue Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skue Sparebank has no effect on the direction of Aurskog Sparebank i.e., Aurskog Sparebank and Skue Sparebank go up and down completely randomly.
Pair Corralation between Aurskog Sparebank and Skue Sparebank
Assuming the 90 days trading horizon Aurskog Sparebank is expected to generate 0.79 times more return on investment than Skue Sparebank. However, Aurskog Sparebank is 1.26 times less risky than Skue Sparebank. It trades about 0.12 of its potential returns per unit of risk. Skue Sparebank is currently generating about 0.08 per unit of risk. If you would invest 22,600 in Aurskog Sparebank on August 29, 2024 and sell it today you would earn a total of 995.00 from holding Aurskog Sparebank or generate 4.4% 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. Skue Sparebank
Performance |
| Timeline |
| Aurskog Sparebank |
| Skue Sparebank |
Aurskog Sparebank and Skue Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurskog Sparebank and Skue Sparebank
The main advantage of trading using opposite Aurskog Sparebank and Skue Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurskog Sparebank position performs unexpectedly, Skue 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 Skue Sparebank will offset losses from the drop in Skue Sparebank's long position.| Aurskog Sparebank vs. Sparebank 1 SMN | Aurskog Sparebank vs. Sparebanken Vest | Aurskog Sparebank vs. Storebrand ASA | Aurskog Sparebank vs. SpareBank 1 stlandet |
| Skue Sparebank vs. Melhus Sparebank | Skue Sparebank vs. Sparebanken Ost | Skue Sparebank vs. Sparebanken Sor |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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