Correlation Between Holand Og and Sparebank
Can any of the company-specific risk be diversified away by investing in both Holand Og 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 Holand Og and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holand og Setskog and Sparebank 1 SR, you can compare the effects of market volatilities on Holand Og 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 Holand Og with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holand Og and Sparebank.
Diversification Opportunities for Holand Og and Sparebank
Very weak diversification
The 3 months correlation between Holand and Sparebank is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Holand og Setskog 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 Holand Og 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 Holand og Setskog 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 Holand Og i.e., Holand Og and Sparebank go up and down completely randomly.
Pair Corralation between Holand Og and Sparebank
Assuming the 90 days trading horizon Holand og Setskog is expected to under-perform the Sparebank. In addition to that, Holand Og is 3.21 times more volatile than Sparebank 1 SR. It trades about -0.05 of its total potential returns per unit of risk. Sparebank 1 SR is currently generating about -0.02 per unit of volatility. If you would invest 14,540 in Sparebank 1 SR on September 5, 2024 and sell it today you would lose (100.00) from holding Sparebank 1 SR or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Holand og Setskog vs. Sparebank 1 SR
Performance |
| Timeline |
| Holand og Setskog |
| Sparebank 1 SR |
Holand Og and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holand Og and Sparebank
The main advantage of trading using opposite Holand Og and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holand Og 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.| Holand Og vs. Melhus Sparebank | Holand Og vs. Aurskog Sparebank | Holand Og vs. Sparebanken Sor | Holand Og vs. Sparebank 1 Ringerike |
| Sparebank vs. Holand og Setskog | Sparebank vs. Elkem ASA | Sparebank vs. Integrated Wind Solutions | Sparebank vs. Vow 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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