Correlation Between Jaeren Sparebank and SpareBank
Can any of the company-specific risk be diversified away by investing in both Jaeren Sparebank and 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 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 SpareBank 1 stlandet, you can compare the effects of market volatilities on Jaeren Sparebank and 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 SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaeren Sparebank and SpareBank.
Diversification Opportunities for Jaeren Sparebank and SpareBank
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jaeren and SpareBank is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jaeren Sparebank and SpareBank 1 stlandet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 stlandet 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 SpareBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpareBank 1 stlandet has no effect on the direction of Jaeren Sparebank i.e., Jaeren Sparebank and SpareBank go up and down completely randomly.
Pair Corralation between Jaeren Sparebank and SpareBank
Assuming the 90 days trading horizon Jaeren Sparebank is expected to generate 1.07 times more return on investment than SpareBank. However, Jaeren Sparebank is 1.07 times more volatile than SpareBank 1 stlandet. It trades about 0.09 of its potential returns per unit of risk. SpareBank 1 stlandet is currently generating about 0.08 per unit of risk. If you would invest 23,502 in Jaeren Sparebank on September 2, 2024 and sell it today you would earn a total of 8,388 from holding Jaeren Sparebank or generate 35.69% 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. SpareBank 1 stlandet
Performance |
| Timeline |
| Jaeren Sparebank |
| SpareBank 1 stlandet |
Jaeren Sparebank and SpareBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaeren Sparebank and SpareBank
The main advantage of trading using opposite Jaeren Sparebank and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaeren Sparebank position performs unexpectedly, 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 SpareBank will offset losses from the drop in SpareBank's long position.| Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Sparebank 1 Nord Norge | Jaeren Sparebank vs. Sparebanken Vest | Jaeren Sparebank vs. Sparebank 1 Ostfold |
| SpareBank vs. Sparebank 1 SMN | SpareBank vs. Sparebank 1 Nord Norge | SpareBank vs. Sparebanken Vest | SpareBank vs. Sparebank 1 SR |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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