Correlation Between Bien Sparebank and Nordic Technology
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and Nordic Technology 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 Nordic Technology 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 Nordic Technology Group, you can compare the effects of market volatilities on Bien Sparebank and Nordic Technology 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 Nordic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and Nordic Technology.
Diversification Opportunities for Bien Sparebank and Nordic Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bien and Nordic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and Nordic Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Technology 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 Nordic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Technology has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and Nordic Technology go up and down completely randomly.
Pair Corralation between Bien Sparebank and Nordic Technology
Assuming the 90 days trading horizon Bien Sparebank is expected to generate 7.08 times less return on investment than Nordic Technology. But when comparing it to its historical volatility, Bien Sparebank ASA is 6.7 times less risky than Nordic Technology. It trades about 0.07 of its potential returns per unit of risk. Nordic Technology Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 145.00 in Nordic Technology Group on December 1, 2024 and sell it today you would earn a total of 5.00 from holding Nordic Technology Group or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bien Sparebank ASA vs. Nordic Technology Group
Performance |
| Timeline |
| Bien Sparebank ASA |
| Nordic Technology |
Bien Sparebank and Nordic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bien Sparebank and Nordic Technology
The main advantage of trading using opposite Bien Sparebank and Nordic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, Nordic Technology 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 Nordic Technology will offset losses from the drop in Nordic Technology's long position.| Bien Sparebank vs. Romsdal Sparebank | Bien Sparebank vs. Cloudberry Clean Energy | Bien Sparebank vs. Nordhealth AS | Bien Sparebank vs. Nordic Mining ASA |
| Nordic Technology vs. Nordic Mining ASA | Nordic Technology vs. Morrow Bank ASA | Nordic Technology vs. Xplora Technologies As | Nordic Technology vs. Norwegian Air Shuttle |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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