Correlation Between Itera ASA and Sogn Sparebank
Can any of the company-specific risk be diversified away by investing in both Itera ASA and Sogn 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 Itera ASA and Sogn Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itera ASA and Sogn Sparebank, you can compare the effects of market volatilities on Itera ASA and Sogn 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 Itera ASA with a short position of Sogn Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itera ASA and Sogn Sparebank.
Diversification Opportunities for Itera ASA and Sogn Sparebank
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Itera and Sogn is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Itera ASA and Sogn Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogn Sparebank and Itera 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 Itera ASA are associated (or correlated) with Sogn Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogn Sparebank has no effect on the direction of Itera ASA i.e., Itera ASA and Sogn Sparebank go up and down completely randomly.
Pair Corralation between Itera ASA and Sogn Sparebank
Assuming the 90 days trading horizon Itera ASA is expected to under-perform the Sogn Sparebank. But the stock apears to be less risky and, when comparing its historical volatility, Itera ASA is 1.51 times less risky than Sogn Sparebank. The stock trades about -0.02 of its potential returns per unit of risk. The Sogn Sparebank is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 23,995 in Sogn Sparebank on November 30, 2024 and sell it today you would earn a total of 405.00 from holding Sogn Sparebank or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itera ASA vs. Sogn Sparebank
Performance |
| Timeline |
| Itera ASA |
| Sogn Sparebank |
Itera ASA and Sogn Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itera ASA and Sogn Sparebank
The main advantage of trading using opposite Itera ASA and Sogn Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itera ASA position performs unexpectedly, Sogn 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 Sogn Sparebank will offset losses from the drop in Sogn Sparebank's long position.| Itera ASA vs. Xplora Technologies As | Itera ASA vs. Odfjell Technology | Itera ASA vs. Instabank ASA | Itera ASA vs. Jaeren Sparebank |
| Sogn Sparebank vs. Sparebanken Sor | Sogn Sparebank vs. SpareBank 1 stlandet | Sogn Sparebank vs. Holand og Setskog | Sogn Sparebank vs. Sparebank 1 Ringerike |
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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