Correlation Between DnB ASA and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both DnB ASA and Jaeren 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 DnB ASA and Jaeren Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DnB ASA and Jaeren Sparebank, you can compare the effects of market volatilities on DnB ASA and Jaeren 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 DnB ASA with a short position of Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DnB ASA and Jaeren Sparebank.
Diversification Opportunities for DnB ASA and Jaeren Sparebank
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DnB and Jaeren is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DnB ASA and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank 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 Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of DnB ASA i.e., DnB ASA and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between DnB ASA and Jaeren Sparebank
Assuming the 90 days trading horizon DnB ASA is expected to generate 1.3 times less return on investment than Jaeren Sparebank. But when comparing it to its historical volatility, DnB ASA is 1.27 times less risky than Jaeren Sparebank. It trades about 0.07 of its potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 21,988 in Jaeren Sparebank on November 5, 2024 and sell it today you would earn a total of 12,912 from holding Jaeren Sparebank or generate 58.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DnB ASA vs. Jaeren Sparebank
Performance |
| Timeline |
| DnB ASA |
| Jaeren Sparebank |
DnB ASA and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DnB ASA and Jaeren Sparebank
The main advantage of trading using opposite DnB ASA and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DnB ASA position performs unexpectedly, Jaeren 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank's long position.| DnB ASA vs. Telenor ASA | DnB ASA vs. Storebrand ASA | DnB ASA vs. Orkla ASA | DnB ASA vs. Gjensidige Forsikring ASA |
| Jaeren Sparebank vs. Odfjell Technology | Jaeren Sparebank vs. Techstep ASA | Jaeren Sparebank vs. Arcticzymes Technologies ASA | Jaeren Sparebank vs. Aasen 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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