Correlation Between Instabank ASA and Xplora Technologies
Can any of the company-specific risk be diversified away by investing in both Instabank ASA and Xplora Technologies 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 Xplora Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instabank ASA and Xplora Technologies As, you can compare the effects of market volatilities on Instabank ASA and Xplora Technologies 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 Xplora Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Xplora Technologies.
Diversification Opportunities for Instabank ASA and Xplora Technologies
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Instabank and Xplora is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Instabank ASA and Xplora Technologies As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xplora Technologies 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 Xplora Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xplora Technologies has no effect on the direction of Instabank ASA i.e., Instabank ASA and Xplora Technologies go up and down completely randomly.
Pair Corralation between Instabank ASA and Xplora Technologies
Assuming the 90 days trading horizon Instabank ASA is expected to under-perform the Xplora Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Instabank ASA is 1.63 times less risky than Xplora Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The Xplora Technologies As is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,470 in Xplora Technologies As on August 29, 2024 and sell it today you would earn a total of 490.00 from holding Xplora Technologies As or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instabank ASA vs. Xplora Technologies As
Performance |
| Timeline |
| Instabank ASA |
| Xplora Technologies |
Instabank ASA and Xplora Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instabank ASA and Xplora Technologies
The main advantage of trading using opposite Instabank ASA and Xplora Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instabank ASA position performs unexpectedly, Xplora Technologies 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 Xplora Technologies will offset losses from the drop in Xplora Technologies' long position.| Instabank ASA vs. DnB ASA | Instabank ASA vs. Sparebank 1 SR | Instabank ASA vs. Sparebank 1 SMN | Instabank ASA vs. Sparebank 1 Ostfold |
| Xplora Technologies vs. Nordic Unmanned As | Xplora Technologies vs. Huddlestock Fintech As | Xplora Technologies vs. Elkem ASA | Xplora Technologies vs. Integrated Wind Solutions |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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