Correlation Between Grong Sparebank and Sparebanken Ost
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank and Sparebanken Ost 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 Sparebanken Ost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and Sparebanken Ost, you can compare the effects of market volatilities on Grong Sparebank and Sparebanken Ost 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 Sparebanken Ost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Sparebanken Ost.
Diversification Opportunities for Grong Sparebank and Sparebanken Ost
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grong and Sparebanken is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost 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 Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Grong Sparebank i.e., Grong Sparebank and Sparebanken Ost go up and down completely randomly.
Pair Corralation between Grong Sparebank and Sparebanken Ost
Assuming the 90 days trading horizon Grong Sparebank is expected to under-perform the Sparebanken Ost. But the stock apears to be less risky and, when comparing its historical volatility, Grong Sparebank is 1.14 times less risky than Sparebanken Ost. The stock trades about 0.0 of its potential returns per unit of risk. The Sparebanken Ost is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 7,051 in Sparebanken Ost on November 4, 2024 and sell it today you would earn a total of 708.00 from holding Sparebanken Ost or generate 10.04% 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. Sparebanken Ost
Performance |
| Timeline |
| Grong Sparebank |
| Sparebanken Ost |
Grong Sparebank and Sparebanken Ost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Sparebanken Ost
The main advantage of trading using opposite Grong Sparebank and Sparebanken Ost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank position performs unexpectedly, Sparebanken Ost 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 Ost will offset losses from the drop in Sparebanken Ost's long position.| Grong Sparebank vs. Pareto Bank ASA | Grong Sparebank vs. Skue Sparebank | Grong Sparebank vs. Nordic Mining ASA | Grong Sparebank vs. Morrow Bank ASA |
| Sparebanken Ost vs. Romerike Sparebank | Sparebanken Ost vs. Instabank ASA | Sparebanken Ost vs. Skue Sparebank | Sparebanken Ost vs. Kraft Bank 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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