Correlation Between Jaeren Sparebank and Petronor
Can any of the company-specific risk be diversified away by investing in both Jaeren Sparebank and Petronor 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 Petronor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaeren Sparebank and Petronor EP, you can compare the effects of market volatilities on Jaeren Sparebank and Petronor 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 Petronor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaeren Sparebank and Petronor.
Diversification Opportunities for Jaeren Sparebank and Petronor
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jaeren and Petronor is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jaeren Sparebank and Petronor EP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronor EP 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 Petronor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronor EP has no effect on the direction of Jaeren Sparebank i.e., Jaeren Sparebank and Petronor go up and down completely randomly.
Pair Corralation between Jaeren Sparebank and Petronor
Assuming the 90 days trading horizon Jaeren Sparebank is expected to generate 3.35 times less return on investment than Petronor. But when comparing it to its historical volatility, Jaeren Sparebank is 3.82 times less risky than Petronor. It trades about 0.05 of its potential returns per unit of risk. Petronor EP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 985.00 in Petronor EP on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Petronor EP or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaeren Sparebank vs. Petronor EP
Performance |
| Timeline |
| Jaeren Sparebank |
| Petronor EP |
Jaeren Sparebank and Petronor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaeren Sparebank and Petronor
The main advantage of trading using opposite Jaeren Sparebank and Petronor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaeren Sparebank position performs unexpectedly, Petronor 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 Petronor will offset losses from the drop in Petronor's long position.| Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Skue Sparebank | Jaeren Sparebank vs. Instabank ASA | Jaeren Sparebank vs. Waste Plastic Upcycling |
| Petronor vs. Sparebank 1 SMN | Petronor vs. Skue Sparebank | Petronor vs. Jaeren Sparebank | Petronor vs. SpareBank 1 stlandet |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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