Correlation Between Gjensidige Forsikring and Sparebank
Can any of the company-specific risk be diversified away by investing in both Gjensidige Forsikring 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 Gjensidige Forsikring and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gjensidige Forsikring ASA and Sparebank 1 SR, you can compare the effects of market volatilities on Gjensidige Forsikring 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 Gjensidige Forsikring with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gjensidige Forsikring and Sparebank.
Diversification Opportunities for Gjensidige Forsikring and Sparebank
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gjensidige and Sparebank is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gjensidige Forsikring ASA and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Gjensidige Forsikring 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 Gjensidige Forsikring 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 SR has no effect on the direction of Gjensidige Forsikring i.e., Gjensidige Forsikring and Sparebank go up and down completely randomly.
Pair Corralation between Gjensidige Forsikring and Sparebank
Assuming the 90 days trading horizon Gjensidige Forsikring is expected to generate 1.52 times less return on investment than Sparebank. But when comparing it to its historical volatility, Gjensidige Forsikring ASA is 1.15 times less risky than Sparebank. It trades about 0.07 of its potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 13,440 in Sparebank 1 SR on September 2, 2024 and sell it today you would earn a total of 1,000.00 from holding Sparebank 1 SR or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gjensidige Forsikring ASA vs. Sparebank 1 SR
Performance |
| Timeline |
| Gjensidige Forsikring ASA |
| Sparebank 1 SR |
Gjensidige Forsikring and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gjensidige Forsikring and Sparebank
The main advantage of trading using opposite Gjensidige Forsikring and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gjensidige Forsikring 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.| Gjensidige Forsikring vs. DnB ASA | Gjensidige Forsikring vs. Storebrand ASA | Gjensidige Forsikring vs. Orkla ASA | Gjensidige Forsikring vs. Telenor ASA |
| Sparebank vs. DnB ASA | Sparebank vs. Gjensidige Forsikring ASA | Sparebank vs. Orkla ASA | Sparebank vs. Telenor ASA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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