Correlation Between Lea Bank and Xplora Technologies
Can any of the company-specific risk be diversified away by investing in both Lea Bank and Xplora Technologies 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 Xplora Technologies 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 Xplora Technologies As, you can compare the effects of market volatilities on Lea Bank and Xplora Technologies 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 Xplora Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lea Bank and Xplora Technologies.
Diversification Opportunities for Lea Bank and Xplora Technologies
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lea and Xplora is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lea Bank ASA and Xplora Technologies As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xplora Technologies 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 Xplora Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xplora Technologies has no effect on the direction of Lea Bank i.e., Lea Bank and Xplora Technologies go up and down completely randomly.
Pair Corralation between Lea Bank and Xplora Technologies
Assuming the 90 days trading horizon Lea Bank is expected to generate 4.78 times less return on investment than Xplora Technologies. But when comparing it to its historical volatility, Lea Bank ASA is 1.24 times less risky than Xplora Technologies. It trades about 0.09 of its potential returns per unit of risk. Xplora Technologies As is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,470 in Xplora Technologies As on August 29, 2024 and sell it today you would earn a total of 490.00 from holding Xplora Technologies As or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lea Bank ASA vs. Xplora Technologies As
Performance |
| Timeline |
| Lea Bank ASA |
| Xplora Technologies |
Lea Bank and Xplora Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lea Bank and Xplora Technologies
The main advantage of trading using opposite Lea Bank and Xplora Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lea Bank position performs unexpectedly, Xplora Technologies 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 Xplora Technologies will offset losses from the drop in Xplora Technologies' long position.| Lea Bank vs. Elkem ASA | Lea Bank vs. Vow ASA | Lea Bank vs. North Energy ASA | Lea Bank vs. Arcticzymes Technologies ASA |
| Xplora Technologies vs. Nordic Unmanned As | Xplora Technologies vs. Huddlestock Fintech As | Xplora Technologies vs. Elkem ASA | Xplora Technologies vs. Integrated Wind Solutions |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |