Correlation Between Europris ASA and Sparebank
Can any of the company-specific risk be diversified away by investing in both Europris ASA 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 Europris ASA and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europris ASA and Sparebank 1 Nord Norge, you can compare the effects of market volatilities on Europris ASA 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 Europris ASA with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europris ASA and Sparebank.
Diversification Opportunities for Europris ASA and Sparebank
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Europris and Sparebank is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Europris ASA and Sparebank 1 Nord Norge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 Nord and Europris 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 Europris ASA 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 Nord has no effect on the direction of Europris ASA i.e., Europris ASA and Sparebank go up and down completely randomly.
Pair Corralation between Europris ASA and Sparebank
Assuming the 90 days trading horizon Europris ASA is expected to generate 2.97 times less return on investment than Sparebank. In addition to that, Europris ASA is 1.32 times more volatile than Sparebank 1 Nord Norge. It trades about 0.02 of its total potential returns per unit of risk. Sparebank 1 Nord Norge is currently generating about 0.08 per unit of volatility. If you would invest 7,686 in Sparebank 1 Nord Norge on August 25, 2024 and sell it today you would earn a total of 4,002 from holding Sparebank 1 Nord Norge or generate 52.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europris ASA vs. Sparebank 1 Nord Norge
Performance |
| Timeline |
| Europris ASA |
| Sparebank 1 Nord |
Europris ASA and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europris ASA and Sparebank
The main advantage of trading using opposite Europris ASA and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europris ASA 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.| Europris ASA vs. Storebrand ASA | Europris ASA vs. XXL ASA | Europris ASA vs. Orkla ASA | Europris ASA vs. DnB ASA |
| Sparebank vs. Sparebank 1 SMN | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. SpareBank 1 stlandet |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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