Correlation Between Lea Bank and Itera ASA
Can any of the company-specific risk be diversified away by investing in both Lea Bank and Itera ASA 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 Lea Bank and Itera ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lea Bank ASA and Itera ASA, you can compare the effects of market volatilities on Lea Bank and Itera ASA 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 Lea Bank with a short position of Itera ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lea Bank and Itera ASA.
Diversification Opportunities for Lea Bank and Itera ASA
Very good diversification
The 3 months correlation between Lea and Itera is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lea Bank ASA and Itera ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itera ASA and Lea 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 Lea Bank ASA are associated (or correlated) with Itera ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itera ASA has no effect on the direction of Lea Bank i.e., Lea Bank and Itera ASA go up and down completely randomly.
Pair Corralation between Lea Bank and Itera ASA
Assuming the 90 days trading horizon Lea Bank ASA is expected to generate 0.83 times more return on investment than Itera ASA. However, Lea Bank ASA is 1.2 times less risky than Itera ASA. It trades about 0.03 of its potential returns per unit of risk. Itera ASA is currently generating about -0.03 per unit of risk. If you would invest 831.00 in Lea Bank ASA on August 31, 2024 and sell it today you would earn a total of 139.00 from holding Lea Bank ASA or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Lea Bank ASA vs. Itera ASA
Performance |
| Timeline |
| Lea Bank ASA |
| Itera ASA |
Lea Bank and Itera ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lea Bank and Itera ASA
The main advantage of trading using opposite Lea Bank and Itera ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lea Bank position performs unexpectedly, Itera ASA 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 Itera ASA will offset losses from the drop in Itera ASA's long position.| Lea Bank vs. Arcticzymes Technologies ASA | Lea Bank vs. Morrow Bank ASA | Lea Bank vs. Skue Sparebank | Lea Bank vs. Goodtech |
| Itera ASA vs. Dolphin Drilling AS | Itera ASA vs. Pareto Bank ASA | Itera ASA vs. Morrow Bank ASA | Itera ASA vs. Nordic Mining 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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