Correlation Between Baltic Sea and Instabank ASA
Can any of the company-specific risk be diversified away by investing in both Baltic Sea and Instabank ASA 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 Baltic Sea and Instabank ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baltic Sea Properties and Instabank ASA, you can compare the effects of market volatilities on Baltic Sea and Instabank ASA 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 Baltic Sea with a short position of Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baltic Sea and Instabank ASA.
Diversification Opportunities for Baltic Sea and Instabank ASA
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baltic and Instabank is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Baltic Sea Properties and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA and Baltic Sea 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 Baltic Sea Properties are associated (or correlated) with Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of Baltic Sea i.e., Baltic Sea and Instabank ASA go up and down completely randomly.
Pair Corralation between Baltic Sea and Instabank ASA
Assuming the 90 days trading horizon Baltic Sea is expected to generate 2.33 times less return on investment than Instabank ASA. But when comparing it to its historical volatility, Baltic Sea Properties is 1.62 times less risky than Instabank ASA. It trades about 0.02 of its potential returns per unit of risk. Instabank ASA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Instabank ASA on September 12, 2024 and sell it today you would earn a total of 27.00 from holding Instabank ASA or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Baltic Sea Properties vs. Instabank ASA
Performance |
| Timeline |
| Baltic Sea Properties |
| Instabank ASA |
Baltic Sea and Instabank ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baltic Sea and Instabank ASA
The main advantage of trading using opposite Baltic Sea and Instabank ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baltic Sea position performs unexpectedly, Instabank ASA 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 Instabank ASA will offset losses from the drop in Instabank ASA's long position.| Baltic Sea vs. Entra ASA | Baltic Sea vs. Selvaag Bolig ASA | Baltic Sea vs. Kmc Properties ASA | Baltic Sea vs. RomReal Limited |
| Instabank ASA vs. DnB ASA | Instabank ASA vs. Sparebank 1 SMN | Instabank ASA vs. Sparebanken Mre | Instabank ASA vs. Sparebank 1 Ostfold |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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