Correlation Between Jaeren Sparebank and Shelf Drilling
Can any of the company-specific risk be diversified away by investing in both Jaeren Sparebank and Shelf Drilling 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 Shelf Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaeren Sparebank and Shelf Drilling, you can compare the effects of market volatilities on Jaeren Sparebank and Shelf Drilling 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 Shelf Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaeren Sparebank and Shelf Drilling.
Diversification Opportunities for Jaeren Sparebank and Shelf Drilling
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jaeren and Shelf is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Jaeren Sparebank and Shelf Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelf Drilling 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 Shelf Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelf Drilling has no effect on the direction of Jaeren Sparebank i.e., Jaeren Sparebank and Shelf Drilling go up and down completely randomly.
Pair Corralation between Jaeren Sparebank and Shelf Drilling
Assuming the 90 days trading horizon Jaeren Sparebank is expected to generate 0.08 times more return on investment than Shelf Drilling. However, Jaeren Sparebank is 12.82 times less risky than Shelf Drilling. It trades about 0.05 of its potential returns per unit of risk. Shelf Drilling is currently generating about -0.22 per unit of risk. If you would invest 31,695 in Jaeren Sparebank on September 3, 2024 and sell it today you would earn a total of 195.00 from holding Jaeren Sparebank or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaeren Sparebank vs. Shelf Drilling
Performance |
| Timeline |
| Jaeren Sparebank |
| Shelf Drilling |
Jaeren Sparebank and Shelf Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaeren Sparebank and Shelf Drilling
The main advantage of trading using opposite Jaeren Sparebank and Shelf Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaeren Sparebank position performs unexpectedly, Shelf Drilling 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 Shelf Drilling will offset losses from the drop in Shelf Drilling'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 |
| Shelf Drilling vs. BW Offshore | Shelf Drilling vs. Subsea 7 SA | Shelf Drilling vs. Elkem ASA | Shelf Drilling 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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