Correlation Between Grong Sparebank and Aasen Sparebank
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank and Aasen 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 Grong Sparebank and Aasen Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and Aasen Sparebank, you can compare the effects of market volatilities on Grong Sparebank and Aasen 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 Grong Sparebank with a short position of Aasen Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Aasen Sparebank.
Diversification Opportunities for Grong Sparebank and Aasen Sparebank
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grong and Aasen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank and Aasen Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aasen Sparebank and Grong Sparebank 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 Grong Sparebank are associated (or correlated) with Aasen Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aasen Sparebank has no effect on the direction of Grong Sparebank i.e., Grong Sparebank and Aasen Sparebank go up and down completely randomly.
Pair Corralation between Grong Sparebank and Aasen Sparebank
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 2.49 times less return on investment than Aasen Sparebank. But when comparing it to its historical volatility, Grong Sparebank is 1.25 times less risky than Aasen Sparebank. It trades about 0.02 of its potential returns per unit of risk. Aasen Sparebank is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10,011 in Aasen Sparebank on August 27, 2024 and sell it today you would earn a total of 2,211 from holding Aasen Sparebank or generate 22.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grong Sparebank vs. Aasen Sparebank
Performance |
| Timeline |
| Grong Sparebank |
| Aasen Sparebank |
Grong Sparebank and Aasen Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Aasen Sparebank
The main advantage of trading using opposite Grong Sparebank and Aasen Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank position performs unexpectedly, Aasen 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 Aasen Sparebank will offset losses from the drop in Aasen Sparebank's long position.| Grong Sparebank vs. DnB ASA | Grong Sparebank vs. Sparebank 1 SR | Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebanken Mre |
| Aasen Sparebank vs. Grong Sparebank | Aasen Sparebank vs. Melhus Sparebank | Aasen Sparebank vs. Aurskog Sparebank | Aasen Sparebank 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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