Correlation Between DnB ASA and Hermana Holding
Can any of the company-specific risk be diversified away by investing in both DnB ASA and Hermana Holding 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 DnB ASA and Hermana Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DnB ASA and Hermana Holding ASA, you can compare the effects of market volatilities on DnB ASA and Hermana Holding 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 DnB ASA with a short position of Hermana Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of DnB ASA and Hermana Holding.
Diversification Opportunities for DnB ASA and Hermana Holding
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DnB and Hermana is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding DnB ASA and Hermana Holding ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hermana Holding ASA and DnB ASA 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 DnB ASA are associated (or correlated) with Hermana Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hermana Holding ASA has no effect on the direction of DnB ASA i.e., DnB ASA and Hermana Holding go up and down completely randomly.
Pair Corralation between DnB ASA and Hermana Holding
Assuming the 90 days trading horizon DnB ASA is expected to generate 0.3 times more return on investment than Hermana Holding. However, DnB ASA is 3.37 times less risky than Hermana Holding. It trades about -0.03 of its potential returns per unit of risk. Hermana Holding ASA is currently generating about -0.26 per unit of risk. If you would invest 23,070 in DnB ASA on September 16, 2024 and sell it today you would lose (120.00) from holding DnB ASA or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DnB ASA vs. Hermana Holding ASA
Performance |
| Timeline |
| DnB ASA |
| Hermana Holding ASA |
DnB ASA and Hermana Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DnB ASA and Hermana Holding
The main advantage of trading using opposite DnB ASA and Hermana Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DnB ASA position performs unexpectedly, Hermana Holding 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 Hermana Holding will offset losses from the drop in Hermana Holding's long position.| DnB ASA vs. Aurskog Sparebank | DnB ASA vs. Helgeland Sparebank | DnB ASA vs. Kongsberg Gruppen ASA | DnB ASA vs. Napatech AS |
| Hermana Holding vs. Techstep ASA | Hermana Holding vs. Aasen Sparebank | Hermana Holding vs. Nidaros Sparebank | Hermana Holding vs. Skue Sparebank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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