Correlation Between Bien Sparebank and Norbit ASA
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and Norbit 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 Bien Sparebank and Norbit ASA 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 Norbit ASA, you can compare the effects of market volatilities on Bien Sparebank and Norbit 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 Bien Sparebank with a short position of Norbit ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and Norbit ASA.
Diversification Opportunities for Bien Sparebank and Norbit ASA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bien and Norbit is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and Norbit ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norbit ASA 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 Norbit ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norbit ASA has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and Norbit ASA go up and down completely randomly.
Pair Corralation between Bien Sparebank and Norbit ASA
Assuming the 90 days trading horizon Bien Sparebank ASA is expected to generate 0.96 times more return on investment than Norbit ASA. However, Bien Sparebank ASA is 1.04 times less risky than Norbit ASA. It trades about 0.28 of its potential returns per unit of risk. Norbit ASA is currently generating about 0.0 per unit of risk. If you would invest 10,900 in Bien Sparebank ASA on August 31, 2024 and sell it today you would earn a total of 1,200 from holding Bien Sparebank ASA or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bien Sparebank ASA vs. Norbit ASA
Performance |
| Timeline |
| Bien Sparebank ASA |
| Norbit ASA |
Bien Sparebank and Norbit ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bien Sparebank and Norbit ASA
The main advantage of trading using opposite Bien Sparebank and Norbit ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, Norbit 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 Norbit ASA will offset losses from the drop in Norbit ASA'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 |
| Norbit ASA vs. Bien Sparebank ASA | Norbit ASA vs. SD Standard Drilling | Norbit ASA vs. 5Th Planet Games | Norbit ASA vs. Sogn Sparebank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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