Correlation Between Bien Sparebank and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and Grong 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 Bien Sparebank and Grong Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bien Sparebank ASA and Grong Sparebank, you can compare the effects of market volatilities on Bien Sparebank and Grong 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 Bien Sparebank with a short position of Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and Grong Sparebank.
Diversification Opportunities for Bien Sparebank and Grong Sparebank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bien and Grong is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank and Bien 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 Bien Sparebank ASA are associated (or correlated) with Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and Grong Sparebank go up and down completely randomly.
Pair Corralation between Bien Sparebank and Grong Sparebank
Assuming the 90 days trading horizon Bien Sparebank ASA is expected to generate 1.77 times more return on investment than Grong Sparebank. However, Bien Sparebank is 1.77 times more volatile than Grong Sparebank. It trades about 0.33 of its potential returns per unit of risk. Grong Sparebank is currently generating about 0.0 per unit of risk. If you would invest 10,900 in Bien Sparebank ASA on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Bien Sparebank ASA or generate 13.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bien Sparebank ASA vs. Grong Sparebank
Performance |
Timeline |
Bien Sparebank ASA |
Grong Sparebank |
Bien Sparebank and Grong Sparebank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bien Sparebank and Grong Sparebank
The main advantage of trading using opposite Bien Sparebank and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, Grong 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.Bien Sparebank vs. Lea Bank ASA | Bien Sparebank vs. Romerike Sparebank | Bien Sparebank vs. Elkem ASA | Bien Sparebank vs. Integrated Wind Solutions |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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