Correlation Between Helgeland Sparebank and Melhus Sparebank
Can any of the company-specific risk be diversified away by investing in both Helgeland Sparebank and Melhus 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 Helgeland Sparebank and Melhus Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helgeland Sparebank and Melhus Sparebank, you can compare the effects of market volatilities on Helgeland Sparebank and Melhus 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 Helgeland Sparebank with a short position of Melhus Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helgeland Sparebank and Melhus Sparebank.
Diversification Opportunities for Helgeland Sparebank and Melhus Sparebank
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Helgeland and Melhus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Helgeland Sparebank and Melhus Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melhus Sparebank and Helgeland 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 Helgeland Sparebank are associated (or correlated) with Melhus Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melhus Sparebank has no effect on the direction of Helgeland Sparebank i.e., Helgeland Sparebank and Melhus Sparebank go up and down completely randomly.
Pair Corralation between Helgeland Sparebank and Melhus Sparebank
Assuming the 90 days trading horizon Helgeland Sparebank is expected to generate 1.94 times more return on investment than Melhus Sparebank. However, Helgeland Sparebank is 1.94 times more volatile than Melhus Sparebank. It trades about 0.12 of its potential returns per unit of risk. Melhus Sparebank is currently generating about 0.07 per unit of risk. If you would invest 12,740 in Helgeland Sparebank on August 25, 2024 and sell it today you would earn a total of 1,360 from holding Helgeland Sparebank or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
Helgeland Sparebank vs. Melhus Sparebank
Performance |
| Timeline |
| Helgeland Sparebank |
| Melhus Sparebank |
Helgeland Sparebank and Melhus Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helgeland Sparebank and Melhus Sparebank
The main advantage of trading using opposite Helgeland Sparebank and Melhus Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helgeland Sparebank position performs unexpectedly, Melhus 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 Melhus Sparebank will offset losses from the drop in Melhus Sparebank's long position.| Helgeland Sparebank vs. Sparebank 1 Nord Norge | Helgeland Sparebank vs. Sparebank 1 SMN | Helgeland Sparebank vs. Sparebanken Vest | Helgeland Sparebank vs. Sparebanken Mre |
| Melhus Sparebank vs. Sparebank 1 Nord Norge | Melhus Sparebank vs. Aurskog Sparebank | Melhus Sparebank vs. Helgeland 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |