Correlation Between Instabank ASA and Sparebank
Can any of the company-specific risk be diversified away by investing in both Instabank ASA 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 Instabank ASA and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instabank ASA and Sparebank 1 Ostfold, you can compare the effects of market volatilities on Instabank ASA 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 Instabank ASA with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Sparebank.
Diversification Opportunities for Instabank ASA and Sparebank
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Instabank and Sparebank is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Instabank ASA and Sparebank 1 Ostfold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 Ostfold and Instabank ASA 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 Instabank ASA 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 Ostfold has no effect on the direction of Instabank ASA i.e., Instabank ASA and Sparebank go up and down completely randomly.
Pair Corralation between Instabank ASA and Sparebank
Assuming the 90 days trading horizon Instabank ASA is expected to generate 1.45 times more return on investment than Sparebank. However, Instabank ASA is 1.45 times more volatile than Sparebank 1 Ostfold. It trades about 0.01 of its potential returns per unit of risk. Sparebank 1 Ostfold is currently generating about -0.06 per unit of risk. If you would invest 195.00 in Instabank ASA on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Instabank ASA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Instabank ASA vs. Sparebank 1 Ostfold
Performance |
| Timeline |
| Instabank ASA |
| Sparebank 1 Ostfold |
Instabank ASA and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instabank ASA and Sparebank
The main advantage of trading using opposite Instabank ASA and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instabank ASA 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.| Instabank ASA vs. Sparebank 1 SMN | Instabank ASA vs. Sparebank 1 Nord Norge | Instabank ASA vs. Sparebanken Vest | Instabank ASA vs. Sparebank 1 Ostfold |
| Sparebank vs. DnB ASA | Sparebank vs. Gjensidige Forsikring ASA | Sparebank vs. Orkla ASA | Sparebank vs. Telenor 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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