Correlation Between Melhus Sparebank and Horisont Energi
Can any of the company-specific risk be diversified away by investing in both Melhus Sparebank and Horisont Energi 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 Melhus Sparebank and Horisont Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melhus Sparebank and Horisont Energi AS, you can compare the effects of market volatilities on Melhus Sparebank and Horisont Energi 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 Melhus Sparebank with a short position of Horisont Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melhus Sparebank and Horisont Energi.
Diversification Opportunities for Melhus Sparebank and Horisont Energi
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Melhus and Horisont is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Melhus Sparebank and Horisont Energi AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horisont Energi AS and Melhus Sparebank 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 Melhus Sparebank are associated (or correlated) with Horisont Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horisont Energi AS has no effect on the direction of Melhus Sparebank i.e., Melhus Sparebank and Horisont Energi go up and down completely randomly.
Pair Corralation between Melhus Sparebank and Horisont Energi
Assuming the 90 days trading horizon Melhus Sparebank is expected to generate 0.16 times more return on investment than Horisont Energi. However, Melhus Sparebank is 6.07 times less risky than Horisont Energi. It trades about 0.04 of its potential returns per unit of risk. Horisont Energi AS is currently generating about -0.04 per unit of risk. If you would invest 15,400 in Melhus Sparebank on September 3, 2024 and sell it today you would earn a total of 500.00 from holding Melhus Sparebank or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melhus Sparebank vs. Horisont Energi AS
Performance |
| Timeline |
| Melhus Sparebank |
| Horisont Energi AS |
Melhus Sparebank and Horisont Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melhus Sparebank and Horisont Energi
The main advantage of trading using opposite Melhus Sparebank and Horisont Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melhus Sparebank position performs unexpectedly, Horisont Energi 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 Horisont Energi will offset losses from the drop in Horisont Energi's long position.| Melhus Sparebank vs. Sparebank 1 Nord Norge | Melhus Sparebank vs. Aurskog Sparebank | Melhus Sparebank vs. Helgeland Sparebank |
| Horisont Energi vs. Melhus Sparebank | Horisont Energi vs. Austevoll Seafood ASA | Horisont Energi vs. Sea1 Offshore | Horisont Energi vs. Sunndal 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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