Correlation Between Bien Sparebank and North Energy
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and North Energy 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 North Energy 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 North Energy ASA, you can compare the effects of market volatilities on Bien Sparebank and North Energy 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 North Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and North Energy.
Diversification Opportunities for Bien Sparebank and North Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bien and North is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and North Energy ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Energy 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 North Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Energy ASA has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and North Energy go up and down completely randomly.
Pair Corralation between Bien Sparebank and North Energy
Assuming the 90 days trading horizon Bien Sparebank ASA is expected to generate 0.65 times more return on investment than North Energy. However, Bien Sparebank ASA is 1.53 times less risky than North Energy. It trades about 0.08 of its potential returns per unit of risk. North Energy ASA is currently generating about 0.04 per unit of risk. If you would invest 8,695 in Bien Sparebank ASA on November 27, 2024 and sell it today you would earn a total of 5,605 from holding Bien Sparebank ASA or generate 64.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bien Sparebank ASA vs. North Energy ASA
Performance |
| Timeline |
| Bien Sparebank ASA |
| North Energy ASA |
Bien Sparebank and North Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bien Sparebank and North Energy
The main advantage of trading using opposite Bien Sparebank and North Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, North Energy 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 North Energy will offset losses from the drop in North Energy's long position.| Bien Sparebank vs. SpareBank 1 stlandet | Bien Sparebank vs. Goodtech | Bien Sparebank vs. Techstep ASA | Bien Sparebank vs. Xplora Technologies As |
| North Energy vs. Arcticzymes Technologies ASA | North Energy vs. SpareBank 1 stlandet | North Energy vs. Instabank ASA | North Energy vs. Techstep 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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