Correlation Between Grong Sparebank and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank and Kraft Bank 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 Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and Kraft Bank Asa, you can compare the effects of market volatilities on Grong Sparebank and Kraft Bank 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 Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Kraft Bank.
Diversification Opportunities for Grong Sparebank and Kraft Bank
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grong and Kraft is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank Asa 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 Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Grong Sparebank i.e., Grong Sparebank and Kraft Bank go up and down completely randomly.
Pair Corralation between Grong Sparebank and Kraft Bank
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 1.18 times more return on investment than Kraft Bank. However, Grong Sparebank is 1.18 times more volatile than Kraft Bank Asa. It trades about -0.1 of its potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.36 per unit of risk. If you would invest 15,000 in Grong Sparebank on October 25, 2024 and sell it today you would lose (200.00) from holding Grong Sparebank or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grong Sparebank vs. Kraft Bank Asa
Performance |
| Timeline |
| Grong Sparebank |
| Kraft Bank Asa |
Grong Sparebank and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Kraft Bank
The main advantage of trading using opposite Grong Sparebank and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Grong Sparebank vs. Sparebanken Ost | Grong Sparebank vs. Aurskog Sparebank | Grong Sparebank vs. Romerike Sparebank | Grong Sparebank vs. Dolphin Drilling AS |
| Kraft Bank vs. Proximar Seafood AS | Kraft Bank vs. Nordic Mining ASA | Kraft Bank vs. Grieg Seafood ASA | Kraft Bank vs. Grong Sparebank |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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