Correlation Between Bien Sparebank and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and Norwegian Air 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 Norwegian Air 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 Norwegian Air Shuttle, you can compare the effects of market volatilities on Bien Sparebank and Norwegian Air 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 Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and Norwegian Air.
Diversification Opportunities for Bien Sparebank and Norwegian Air
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bien and Norwegian is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and Norwegian Air Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwegian Air Shuttle 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 Norwegian Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwegian Air Shuttle has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and Norwegian Air go up and down completely randomly.
Pair Corralation between Bien Sparebank and Norwegian Air
Assuming the 90 days trading horizon Bien Sparebank ASA is expected to generate 0.47 times more return on investment than Norwegian Air. However, Bien Sparebank ASA is 2.15 times less risky than Norwegian Air. It trades about 0.12 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.01 per unit of risk. If you would invest 8,404 in Bien Sparebank ASA on September 4, 2024 and sell it today you would earn a total of 3,796 from holding Bien Sparebank ASA or generate 45.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bien Sparebank ASA vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Bien Sparebank ASA |
| Norwegian Air Shuttle |
Bien Sparebank and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bien Sparebank and Norwegian Air
The main advantage of trading using opposite Bien Sparebank and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, Norwegian Air 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 Norwegian Air will offset losses from the drop in Norwegian Air'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 |
| Norwegian Air vs. Danske Bank AS | Norwegian Air vs. Kongsberg Automotive Holding | Norwegian Air vs. Nel 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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