Correlation Between Deep Value and Melhus Sparebank
Can any of the company-specific risk be diversified away by investing in both Deep Value and Melhus 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 Deep Value and Melhus Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deep Value Driller and Melhus Sparebank, you can compare the effects of market volatilities on Deep Value and Melhus 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 Deep Value with a short position of Melhus Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deep Value and Melhus Sparebank.
Diversification Opportunities for Deep Value and Melhus Sparebank
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deep and Melhus is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Deep Value Driller and Melhus Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melhus Sparebank and Deep Value 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 Deep Value Driller are associated (or correlated) with Melhus Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melhus Sparebank has no effect on the direction of Deep Value i.e., Deep Value and Melhus Sparebank go up and down completely randomly.
Pair Corralation between Deep Value and Melhus Sparebank
Assuming the 90 days trading horizon Deep Value Driller is expected to under-perform the Melhus Sparebank. In addition to that, Deep Value is 2.1 times more volatile than Melhus Sparebank. It trades about -0.09 of its total potential returns per unit of risk. Melhus Sparebank is currently generating about 0.02 per unit of volatility. If you would invest 15,900 in Melhus Sparebank on October 24, 2024 and sell it today you would earn a total of 100.00 from holding Melhus Sparebank or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deep Value Driller vs. Melhus Sparebank
Performance |
| Timeline |
| Deep Value Driller |
| Melhus Sparebank |
Deep Value and Melhus Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deep Value and Melhus Sparebank
The main advantage of trading using opposite Deep Value and Melhus Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deep Value position performs unexpectedly, Melhus 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 Melhus Sparebank will offset losses from the drop in Melhus Sparebank's long position.| Deep Value vs. Austevoll Seafood ASA | Deep Value vs. Lery Seafood Group | Deep Value vs. Nordic Mining ASA | Deep Value vs. Xplora Technologies As |
| Melhus Sparebank vs. Sparebank 1 Nord Norge | Melhus Sparebank vs. Aurskog Sparebank | Melhus Sparebank vs. Helgeland 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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