Correlation Between Kraft Bank and Melhus Sparebank
Can any of the company-specific risk be diversified away by investing in both Kraft Bank and Melhus 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 Melhus 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 Melhus Sparebank, you can compare the effects of market volatilities on Kraft Bank and Melhus 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 Melhus Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Melhus Sparebank.
Diversification Opportunities for Kraft Bank and Melhus Sparebank
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kraft and Melhus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa and Melhus Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melhus 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 Melhus Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melhus Sparebank has no effect on the direction of Kraft Bank i.e., Kraft Bank and Melhus Sparebank go up and down completely randomly.
Pair Corralation between Kraft Bank and Melhus Sparebank
Assuming the 90 days trading horizon Kraft Bank Asa is expected to generate 1.45 times more return on investment than Melhus Sparebank. However, Kraft Bank is 1.45 times more volatile than Melhus Sparebank. It trades about 0.16 of its potential returns per unit of risk. Melhus Sparebank is currently generating about 0.2 per unit of risk. If you would invest 835.00 in Kraft Bank Asa on November 27, 2024 and sell it today you would earn a total of 45.00 from holding Kraft Bank Asa or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Bank Asa vs. Melhus Sparebank
Performance |
| Timeline |
| Kraft Bank Asa |
| Melhus Sparebank |
Kraft Bank and Melhus Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Bank and Melhus Sparebank
The main advantage of trading using opposite Kraft Bank and Melhus Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank position performs unexpectedly, Melhus 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 Melhus Sparebank will offset losses from the drop in Melhus Sparebank's long position.| Kraft Bank vs. Techstep ASA | Kraft Bank vs. Nidaros Sparebank | Kraft Bank vs. Sparebanken Ost | Kraft Bank vs. Norwegian Air Shuttle |
| Melhus Sparebank vs. Sparebank 1 Nord Norge | Melhus Sparebank vs. Aurskog Sparebank | Melhus Sparebank vs. Helgeland Sparebank |
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.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |