Correlation Between Bloomsbury Publishing and Sparebank
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing and Sparebank 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 Bloomsbury Publishing and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and Sparebank 1 SR, you can compare the effects of market volatilities on Bloomsbury Publishing and Sparebank 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 Bloomsbury Publishing with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and Sparebank.
Diversification Opportunities for Bloomsbury Publishing and Sparebank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bloomsbury and Sparebank is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and Sparebank go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and Sparebank
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the Sparebank. In addition to that, Bloomsbury Publishing is 2.01 times more volatile than Sparebank 1 SR. It trades about -0.01 of its total potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.13 per unit of volatility. If you would invest 13,200 in Sparebank 1 SR on September 3, 2024 and sell it today you would earn a total of 1,280 from holding Sparebank 1 SR or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. Sparebank 1 SR
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| Sparebank 1 SR |
Bloomsbury Publishing and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and Sparebank
The main advantage of trading using opposite Bloomsbury Publishing and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank's long position.| Bloomsbury Publishing vs. Intuitive Investments Group | Bloomsbury Publishing vs. European Metals Holdings | Bloomsbury Publishing vs. Athelney Trust plc | Bloomsbury Publishing vs. Invesco Health Care |
| Sparebank vs. Porvair plc | Sparebank vs. Gaming Realms plc | Sparebank vs. Cairn Homes PLC | Sparebank vs. Bloomsbury Publishing Plc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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