Correlation Between Bien Sparebank and Salmon Evolution
Can any of the company-specific risk be diversified away by investing in both Bien Sparebank and Salmon Evolution 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 Salmon Evolution 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 Salmon Evolution Holding, you can compare the effects of market volatilities on Bien Sparebank and Salmon Evolution 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 Salmon Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bien Sparebank and Salmon Evolution.
Diversification Opportunities for Bien Sparebank and Salmon Evolution
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bien and Salmon is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bien Sparebank ASA and Salmon Evolution Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salmon Evolution Holding 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 Salmon Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salmon Evolution Holding has no effect on the direction of Bien Sparebank i.e., Bien Sparebank and Salmon Evolution go up and down completely randomly.
Pair Corralation between Bien Sparebank and Salmon Evolution
Assuming the 90 days trading horizon Bien Sparebank ASA is expected to generate 1.04 times more return on investment than Salmon Evolution. However, Bien Sparebank is 1.04 times more volatile than Salmon Evolution Holding. It trades about 0.14 of its potential returns per unit of risk. Salmon Evolution Holding is currently generating about -0.09 per unit of risk. If you would invest 11,800 in Bien Sparebank ASA on September 12, 2024 and sell it today you would earn a total of 600.00 from holding Bien Sparebank ASA or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bien Sparebank ASA vs. Salmon Evolution Holding
Performance |
| Timeline |
| Bien Sparebank ASA |
| Salmon Evolution Holding |
Bien Sparebank and Salmon Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bien Sparebank and Salmon Evolution
The main advantage of trading using opposite Bien Sparebank and Salmon Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bien Sparebank position performs unexpectedly, Salmon Evolution 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 Salmon Evolution will offset losses from the drop in Salmon Evolution's long position.| Bien Sparebank vs. Lea Bank ASA | Bien Sparebank vs. Romerike Sparebank | Bien Sparebank vs. Kongsberg Gruppen ASA | Bien Sparebank vs. Napatech AS |
| Salmon Evolution vs. SalMar ASA | Salmon Evolution vs. Lery Seafood Group | Salmon Evolution vs. Pf Bakkafrost | Salmon Evolution vs. Grieg 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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