Correlation Between Equinor ASA and Sparebanken Sor
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Sparebanken Sor 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 Equinor ASA and Sparebanken Sor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA and Sparebanken Sor, you can compare the effects of market volatilities on Equinor ASA and Sparebanken Sor 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 Equinor ASA with a short position of Sparebanken Sor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Sparebanken Sor.
Diversification Opportunities for Equinor ASA and Sparebanken Sor
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equinor and Sparebanken is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA and Sparebanken Sor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Sor and Equinor 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 Equinor ASA are associated (or correlated) with Sparebanken Sor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Sor has no effect on the direction of Equinor ASA i.e., Equinor ASA and Sparebanken Sor go up and down completely randomly.
Pair Corralation between Equinor ASA and Sparebanken Sor
Assuming the 90 days trading horizon Equinor ASA is expected to generate 2.04 times more return on investment than Sparebanken Sor. However, Equinor ASA is 2.04 times more volatile than Sparebanken Sor. It trades about 0.06 of its potential returns per unit of risk. Sparebanken Sor is currently generating about 0.05 per unit of risk. If you would invest 26,501 in Equinor ASA on August 28, 2024 and sell it today you would earn a total of 619.00 from holding Equinor ASA or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinor ASA vs. Sparebanken Sor
Performance |
| Timeline |
| Equinor ASA |
| Sparebanken Sor |
Equinor ASA and Sparebanken Sor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Sparebanken Sor
The main advantage of trading using opposite Equinor ASA and Sparebanken Sor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Sparebanken Sor 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 Sparebanken Sor will offset losses from the drop in Sparebanken Sor's long position.| Equinor ASA vs. DnB ASA | Equinor ASA vs. Mowi ASA | Equinor ASA vs. Yara International ASA | Equinor ASA vs. Telenor ASA |
| Sparebanken Sor vs. Sparebanken Vest | Sparebanken Sor vs. Sparebank 1 Nord Norge | Sparebanken Sor vs. Sparebank 1 SMN | Sparebanken Sor vs. Sparebanken Ost |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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