Correlation Between Jaeren Sparebank and Sparebanken Ost
Can any of the company-specific risk be diversified away by investing in both Jaeren Sparebank and Sparebanken Ost 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 Sparebanken Ost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaeren Sparebank and Sparebanken Ost, you can compare the effects of market volatilities on Jaeren Sparebank and Sparebanken Ost 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 Sparebanken Ost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaeren Sparebank and Sparebanken Ost.
Diversification Opportunities for Jaeren Sparebank and Sparebanken Ost
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jaeren and Sparebanken is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jaeren Sparebank and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost 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 Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Jaeren Sparebank i.e., Jaeren Sparebank and Sparebanken Ost go up and down completely randomly.
Pair Corralation between Jaeren Sparebank and Sparebanken Ost
Assuming the 90 days trading horizon Jaeren Sparebank is expected to generate 0.35 times more return on investment than Sparebanken Ost. However, Jaeren Sparebank is 2.83 times less risky than Sparebanken Ost. It trades about 0.05 of its potential returns per unit of risk. Sparebanken Ost is currently generating about 0.0 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jaeren Sparebank vs. Sparebanken Ost
Performance |
| Timeline |
| Jaeren Sparebank |
| Sparebanken Ost |
Jaeren Sparebank and Sparebanken Ost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaeren Sparebank and Sparebanken Ost
The main advantage of trading using opposite Jaeren Sparebank and Sparebanken Ost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaeren Sparebank position performs unexpectedly, Sparebanken Ost 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 Sparebanken Ost will offset losses from the drop in Sparebanken Ost'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 |
| Sparebanken Ost vs. Melhus Sparebank | Sparebanken Ost vs. Holand og Setskog | Sparebanken Ost vs. Helgeland Sparebank | Sparebanken Ost vs. Elkem 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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