Correlation Between Intuitive Investments and Sparebanken Vest
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments and Sparebanken Vest 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 Intuitive Investments and Sparebanken Vest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Investments Group and Sparebanken Vest, you can compare the effects of market volatilities on Intuitive Investments and Sparebanken Vest 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 Intuitive Investments with a short position of Sparebanken Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and Sparebanken Vest.
Diversification Opportunities for Intuitive Investments and Sparebanken Vest
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intuitive and Sparebanken is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and Sparebanken Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Vest and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with Sparebanken Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Vest has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and Sparebanken Vest go up and down completely randomly.
Pair Corralation between Intuitive Investments and Sparebanken Vest
Assuming the 90 days trading horizon Intuitive Investments is expected to generate 1.81 times less return on investment than Sparebanken Vest. In addition to that, Intuitive Investments is 2.82 times more volatile than Sparebanken Vest. It trades about 0.07 of its total potential returns per unit of risk. Sparebanken Vest is currently generating about 0.33 per unit of volatility. If you would invest 13,000 in Sparebanken Vest on October 10, 2024 and sell it today you would earn a total of 1,180 from holding Sparebanken Vest or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. Sparebanken Vest
Performance |
| Timeline |
| Intuitive Investments |
| Sparebanken Vest |
Intuitive Investments and Sparebanken Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and Sparebanken Vest
The main advantage of trading using opposite Intuitive Investments and Sparebanken Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments position performs unexpectedly, Sparebanken Vest 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 Vest will offset losses from the drop in Sparebanken Vest's long position.The idea behind Intuitive Investments Group and Sparebanken Vest pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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