Correlation Between Bien Sparebank and Lery Seafood
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and Lery Seafood 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 Lery Seafood 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 Lery Seafood Group, you can compare the effects of market volatilities on Bien Sparebank and Lery Seafood 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 Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and Lery Seafood.
Diversification Opportunities for Bien Sparebank and Lery Seafood
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bien and Lery is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and Lery Seafood go up and down completely randomly.
Pair Corralation between Bien Sparebank and Lery Seafood
Assuming the 90 days trading horizon Bien Sparebank ASA is expected to generate 1.15 times more return on investment than Lery Seafood. However, Bien Sparebank is 1.15 times more volatile than Lery Seafood Group. It trades about 0.28 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.02 per unit of risk. If you would invest 10,900 in Bien Sparebank ASA on September 4, 2024 and sell it today you would earn a total of 1,300 from holding Bien Sparebank ASA or generate 11.93% 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. Lery Seafood Group
Performance |
| Timeline |
| Bien Sparebank ASA |
| Lery Seafood Group |
Bien Sparebank and Lery Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bien Sparebank and Lery Seafood
The main advantage of trading using opposite Bien Sparebank and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, Lery Seafood 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.| Bien Sparebank vs. Sparebanken Ost | Bien Sparebank vs. Nordic Mining ASA | Bien Sparebank vs. Nidaros Sparebank | Bien Sparebank vs. Austevoll Seafood ASA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |