Correlation Between Hynion AS and Romsdal Sparebank
Can any of the company-specific risk be diversified away by investing in both Hynion AS and Romsdal 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 Hynion AS and Romsdal Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hynion AS and Romsdal Sparebank, you can compare the effects of market volatilities on Hynion AS and Romsdal 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 Hynion AS with a short position of Romsdal Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hynion AS and Romsdal Sparebank.
Diversification Opportunities for Hynion AS and Romsdal Sparebank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hynion and Romsdal is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hynion AS and Romsdal Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Romsdal Sparebank and Hynion AS 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 Hynion AS are associated (or correlated) with Romsdal Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Romsdal Sparebank has no effect on the direction of Hynion AS i.e., Hynion AS and Romsdal Sparebank go up and down completely randomly.
Pair Corralation between Hynion AS and Romsdal Sparebank
Assuming the 90 days trading horizon Hynion AS is expected to generate 18.71 times more return on investment than Romsdal Sparebank. However, Hynion AS is 18.71 times more volatile than Romsdal Sparebank. It trades about 0.19 of its potential returns per unit of risk. Romsdal Sparebank is currently generating about 0.08 per unit of risk. If you would invest 11.00 in Hynion AS on October 24, 2024 and sell it today you would earn a total of 5.00 from holding Hynion AS or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Hynion AS vs. Romsdal Sparebank
Performance |
| Timeline |
| Hynion AS |
| Romsdal Sparebank |
Hynion AS and Romsdal Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hynion AS and Romsdal Sparebank
The main advantage of trading using opposite Hynion AS and Romsdal Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hynion AS position performs unexpectedly, Romsdal 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 Romsdal Sparebank will offset losses from the drop in Romsdal Sparebank's long position.| Hynion AS vs. Romsdal Sparebank | Hynion AS vs. Bien Sparebank ASA | Hynion AS vs. Melhus Sparebank | Hynion AS vs. Sogn Sparebank |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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