Correlation Between Kraft Bank and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both Kraft Bank and Jaeren 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 Jaeren 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 Jaeren Sparebank, you can compare the effects of market volatilities on Kraft Bank and Jaeren 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 Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Jaeren Sparebank.
Diversification Opportunities for Kraft Bank and Jaeren Sparebank
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kraft and Jaeren is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren 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 Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of Kraft Bank i.e., Kraft Bank and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between Kraft Bank and Jaeren Sparebank
Assuming the 90 days trading horizon Kraft Bank Asa is expected to under-perform the Jaeren Sparebank. In addition to that, Kraft Bank is 1.55 times more volatile than Jaeren Sparebank. It trades about -0.07 of its total potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.19 per unit of volatility. If you would invest 31,500 in Jaeren Sparebank on October 26, 2024 and sell it today you would earn a total of 2,700 from holding Jaeren Sparebank or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Bank Asa vs. Jaeren Sparebank
Performance |
| Timeline |
| Kraft Bank Asa |
| Jaeren Sparebank |
Kraft Bank and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Bank and Jaeren Sparebank
The main advantage of trading using opposite Kraft Bank and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank position performs unexpectedly, Jaeren 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank's long position.| Kraft Bank vs. Sea1 Offshore | Kraft Bank vs. Melhus Sparebank | Kraft Bank vs. Helgeland Sparebank | Kraft Bank vs. Awilco Drilling PLC |
| Jaeren Sparebank vs. DnB ASA | Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Sparebanken Mre | Jaeren Sparebank vs. Sparebank 1 Ostfold |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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