Correlation Between Jaeren Sparebank and Instabank ASA
Can any of the company-specific risk be diversified away by investing in both Jaeren Sparebank and Instabank ASA 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 Jaeren Sparebank and Instabank ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaeren Sparebank and Instabank ASA, you can compare the effects of market volatilities on Jaeren Sparebank and Instabank ASA 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 Jaeren Sparebank with a short position of Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaeren Sparebank and Instabank ASA.
Diversification Opportunities for Jaeren Sparebank and Instabank ASA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jaeren and Instabank is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jaeren Sparebank and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA and Jaeren Sparebank 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 Jaeren Sparebank are associated (or correlated) with Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of Jaeren Sparebank i.e., Jaeren Sparebank and Instabank ASA go up and down completely randomly.
Pair Corralation between Jaeren Sparebank and Instabank ASA
Assuming the 90 days trading horizon Jaeren Sparebank is expected to generate 0.87 times more return on investment than Instabank ASA. However, Jaeren Sparebank is 1.16 times less risky than Instabank ASA. It trades about 0.3 of its potential returns per unit of risk. Instabank ASA is currently generating about 0.19 per unit of risk. If you would invest 33,600 in Jaeren Sparebank on November 10, 2024 and sell it today you would earn a total of 2,300 from holding Jaeren Sparebank or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaeren Sparebank vs. Instabank ASA
Performance |
| Timeline |
| Jaeren Sparebank |
| Instabank ASA |
Jaeren Sparebank and Instabank ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaeren Sparebank and Instabank ASA
The main advantage of trading using opposite Jaeren Sparebank and Instabank ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaeren Sparebank position performs unexpectedly, Instabank ASA 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 Instabank ASA will offset losses from the drop in Instabank ASA's long position.| Jaeren Sparebank vs. Morrow Bank ASA | Jaeren Sparebank vs. Golden Energy Offshore | Jaeren Sparebank vs. Grong Sparebank | Jaeren Sparebank vs. Nidaros Sparebank |
| Instabank ASA vs. Melhus Sparebank | Instabank ASA vs. Nidaros Sparebank | Instabank ASA vs. Pareto Bank ASA | Instabank ASA vs. Kraft Bank 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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