Correlation Between Jaeren Sparebank and Nidaros Sparebank
Can any of the company-specific risk be diversified away by investing in both Jaeren Sparebank and Nidaros 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 Jaeren Sparebank and Nidaros Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaeren Sparebank and Nidaros Sparebank, you can compare the effects of market volatilities on Jaeren Sparebank and Nidaros 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 Jaeren Sparebank with a short position of Nidaros Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaeren Sparebank and Nidaros Sparebank.
Diversification Opportunities for Jaeren Sparebank and Nidaros Sparebank
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jaeren and Nidaros is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jaeren Sparebank and Nidaros Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidaros Sparebank 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 Nidaros Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidaros Sparebank has no effect on the direction of Jaeren Sparebank i.e., Jaeren Sparebank and Nidaros Sparebank go up and down completely randomly.
Pair Corralation between Jaeren Sparebank and Nidaros Sparebank
Assuming the 90 days trading horizon Jaeren Sparebank is expected to generate 1.63 times more return on investment than Nidaros Sparebank. However, Jaeren Sparebank is 1.63 times more volatile than Nidaros Sparebank. It trades about 0.0 of its potential returns per unit of risk. Nidaros Sparebank is currently generating about -0.35 per unit of risk. If you would invest 31,895 in Jaeren Sparebank on September 1, 2024 and sell it today you would lose (5.00) from holding Jaeren Sparebank or give up 0.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaeren Sparebank vs. Nidaros Sparebank
Performance |
| Timeline |
| Jaeren Sparebank |
| Nidaros Sparebank |
Jaeren Sparebank and Nidaros Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaeren Sparebank and Nidaros Sparebank
The main advantage of trading using opposite Jaeren Sparebank and Nidaros Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaeren Sparebank position performs unexpectedly, Nidaros 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 Nidaros Sparebank will offset losses from the drop in Nidaros Sparebank's long position.| Jaeren Sparebank vs. Napatech AS | Jaeren Sparebank vs. Lery Seafood Group | Jaeren Sparebank vs. Arcticzymes Technologies ASA | Jaeren Sparebank vs. Kraft Bank Asa |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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