Correlation Between Kraft Bank and Aasen Sparebank
Can any of the company-specific risk be diversified away by investing in both Kraft Bank and Aasen 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 Kraft Bank and Aasen Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Bank Asa and Aasen Sparebank, you can compare the effects of market volatilities on Kraft Bank and Aasen 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 Kraft Bank with a short position of Aasen Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Aasen Sparebank.
Diversification Opportunities for Kraft Bank and Aasen Sparebank
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kraft and Aasen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa and Aasen Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aasen Sparebank and Kraft Bank 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 Kraft Bank Asa are associated (or correlated) with Aasen Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aasen Sparebank has no effect on the direction of Kraft Bank i.e., Kraft Bank and Aasen Sparebank go up and down completely randomly.
Pair Corralation between Kraft Bank and Aasen Sparebank
Assuming the 90 days trading horizon Kraft Bank Asa is expected to under-perform the Aasen Sparebank. In addition to that, Kraft Bank is 1.29 times more volatile than Aasen Sparebank. It trades about -0.07 of its total potential returns per unit of risk. Aasen Sparebank is currently generating about 0.24 per unit of volatility. If you would invest 11,398 in Aasen Sparebank on August 28, 2024 and sell it today you would earn a total of 900.00 from holding Aasen Sparebank or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Bank Asa vs. Aasen Sparebank
Performance |
| Timeline |
| Kraft Bank Asa |
| Aasen Sparebank |
Kraft Bank and Aasen Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Bank and Aasen Sparebank
The main advantage of trading using opposite Kraft Bank and Aasen Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank position performs unexpectedly, Aasen 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 Aasen Sparebank will offset losses from the drop in Aasen Sparebank's long position.| Kraft Bank vs. DnB ASA | Kraft Bank vs. Sparebank 1 SR | Kraft Bank vs. Sparebank 1 SMN | Kraft Bank vs. Sparebanken Mre |
| Aasen Sparebank vs. Grong Sparebank | Aasen Sparebank vs. Melhus Sparebank | Aasen Sparebank vs. Aurskog Sparebank | Aasen Sparebank vs. Sparebanken Ost |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |