Correlation Between Circa Group and Sparebank
Can any of the company-specific risk be diversified away by investing in both Circa Group 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 Circa Group and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Circa Group AS and Sparebank 1 SMN, you can compare the effects of market volatilities on Circa Group 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 Circa Group with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Circa Group and Sparebank.
Diversification Opportunities for Circa Group and Sparebank
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Circa and Sparebank is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Circa Group AS and Sparebank 1 SMN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SMN and Circa Group 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 Circa Group AS 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 SMN has no effect on the direction of Circa Group i.e., Circa Group and Sparebank go up and down completely randomly.
Pair Corralation between Circa Group and Sparebank
Assuming the 90 days trading horizon Circa Group AS is expected to under-perform the Sparebank. In addition to that, Circa Group is 6.39 times more volatile than Sparebank 1 SMN. It trades about -0.04 of its total potential returns per unit of risk. Sparebank 1 SMN is currently generating about 0.07 per unit of volatility. If you would invest 12,453 in Sparebank 1 SMN on August 31, 2024 and sell it today you would earn a total of 3,957 from holding Sparebank 1 SMN or generate 31.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Circa Group AS vs. Sparebank 1 SMN
Performance |
| Timeline |
| Circa Group AS |
| Sparebank 1 SMN |
Circa Group and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Circa Group and Sparebank
The main advantage of trading using opposite Circa Group and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Circa Group 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.| Circa Group vs. Sparebank 1 SMN | Circa Group vs. Lery Seafood Group | Circa Group vs. Nidaros Sparebank | Circa Group vs. SpareBank 1 stlandet |
| Sparebank vs. Sparebank 1 Nord Norge | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. DnB 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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