Correlation Between Europris ASA and Selvaag Bolig
Can any of the company-specific risk be diversified away by investing in both Europris ASA and Selvaag Bolig 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 Selvaag Bolig into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europris ASA and Selvaag Bolig ASA, you can compare the effects of market volatilities on Europris ASA and Selvaag Bolig 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 Selvaag Bolig. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europris ASA and Selvaag Bolig.
Diversification Opportunities for Europris ASA and Selvaag Bolig
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Europris and Selvaag is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Europris ASA and Selvaag Bolig ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selvaag Bolig ASA 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 Selvaag Bolig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selvaag Bolig ASA has no effect on the direction of Europris ASA i.e., Europris ASA and Selvaag Bolig go up and down completely randomly.
Pair Corralation between Europris ASA and Selvaag Bolig
Assuming the 90 days trading horizon Europris ASA is expected to under-perform the Selvaag Bolig. But the stock apears to be less risky and, when comparing its historical volatility, Europris ASA is 1.21 times less risky than Selvaag Bolig. The stock trades about -0.25 of its potential returns per unit of risk. The Selvaag Bolig ASA is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 3,420 in Selvaag Bolig ASA on August 25, 2024 and sell it today you would lose (235.00) from holding Selvaag Bolig ASA or give up 6.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europris ASA vs. Selvaag Bolig ASA
Performance |
| Timeline |
| Europris ASA |
| Selvaag Bolig ASA |
Europris ASA and Selvaag Bolig Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europris ASA and Selvaag Bolig
The main advantage of trading using opposite Europris ASA and Selvaag Bolig positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europris ASA position performs unexpectedly, Selvaag Bolig 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 Selvaag Bolig will offset losses from the drop in Selvaag Bolig's long position.| Europris ASA vs. Storebrand ASA | Europris ASA vs. XXL ASA | Europris ASA vs. Orkla ASA | Europris ASA vs. DnB ASA |
| Selvaag Bolig vs. Veidekke ASA | Selvaag Bolig vs. Entra ASA | Selvaag Bolig vs. Kid ASA | Selvaag Bolig vs. Olav Thon Eien |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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