Correlation Between Circa Group and Sogn Sparebank
Can any of the company-specific risk be diversified away by investing in both Circa Group and Sogn 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 Sogn 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 Sogn Sparebank, you can compare the effects of market volatilities on Circa Group and Sogn 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 Sogn Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Circa Group and Sogn Sparebank.
Diversification Opportunities for Circa Group and Sogn Sparebank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Circa and Sogn is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Circa Group AS and Sogn Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogn Sparebank 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 Sogn Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogn Sparebank has no effect on the direction of Circa Group i.e., Circa Group and Sogn Sparebank go up and down completely randomly.
Pair Corralation between Circa Group and Sogn Sparebank
Assuming the 90 days trading horizon Circa Group is expected to generate 1.4 times less return on investment than Sogn Sparebank. In addition to that, Circa Group is 2.11 times more volatile than Sogn Sparebank. It trades about 0.05 of its total potential returns per unit of risk. Sogn Sparebank is currently generating about 0.16 per unit of volatility. If you would invest 20,200 in Sogn Sparebank on September 4, 2024 and sell it today you would earn a total of 5,300 from holding Sogn Sparebank or generate 26.24% 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. Sogn Sparebank
Performance |
| Timeline |
| Circa Group AS |
| Sogn Sparebank |
Circa Group and Sogn Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Circa Group and Sogn Sparebank
The main advantage of trading using opposite Circa Group and Sogn Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Circa Group position performs unexpectedly, Sogn 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 Sogn Sparebank will offset losses from the drop in Sogn Sparebank's long position.| Circa Group vs. Sogn Sparebank | Circa Group vs. Nordic Mining ASA | Circa Group vs. Lea Bank ASA | Circa Group vs. Helgeland Sparebank |
| Sogn Sparebank vs. Sparebanken Sor | Sogn Sparebank vs. SpareBank 1 stlandet | Sogn Sparebank vs. Holand og Setskog | Sogn Sparebank vs. Sparebank 1 Ringerike |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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