Correlation Between Lea Bank and Klaveness Combination
Can any of the company-specific risk be diversified away by investing in both Lea Bank and Klaveness Combination 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 Klaveness Combination 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 Klaveness Combination Carriers, you can compare the effects of market volatilities on Lea Bank and Klaveness Combination 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 Klaveness Combination. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lea Bank and Klaveness Combination.
Diversification Opportunities for Lea Bank and Klaveness Combination
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lea and Klaveness is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lea Bank ASA and Klaveness Combination Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klaveness Combination 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 Klaveness Combination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klaveness Combination has no effect on the direction of Lea Bank i.e., Lea Bank and Klaveness Combination go up and down completely randomly.
Pair Corralation between Lea Bank and Klaveness Combination
Assuming the 90 days trading horizon Lea Bank is expected to generate 1.25 times less return on investment than Klaveness Combination. In addition to that, Lea Bank is 1.27 times more volatile than Klaveness Combination Carriers. It trades about 0.04 of its total potential returns per unit of risk. Klaveness Combination Carriers is currently generating about 0.06 per unit of volatility. If you would invest 4,679 in Klaveness Combination Carriers on September 3, 2024 and sell it today you would earn a total of 3,231 from holding Klaveness Combination Carriers or generate 69.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lea Bank ASA vs. Klaveness Combination Carriers
Performance |
| Timeline |
| Lea Bank ASA |
| Klaveness Combination |
Lea Bank and Klaveness Combination Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lea Bank and Klaveness Combination
The main advantage of trading using opposite Lea Bank and Klaveness Combination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lea Bank position performs unexpectedly, Klaveness Combination 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 Klaveness Combination will offset losses from the drop in Klaveness Combination's long position.| Lea Bank vs. Bien Sparebank ASA | Lea Bank vs. Romerike Sparebank | Lea Bank vs. Elkem ASA | Lea Bank vs. Integrated Wind Solutions |
| Klaveness Combination vs. Grong Sparebank | Klaveness Combination vs. Awilco Drilling PLC | Klaveness Combination vs. Lea Bank ASA | Klaveness Combination vs. Polaris Media |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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