Correlation Between Melhus Sparebank and Hynion AS
Can any of the company-specific risk be diversified away by investing in both Melhus Sparebank and Hynion AS 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 Hynion AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melhus Sparebank and Hynion AS, you can compare the effects of market volatilities on Melhus Sparebank and Hynion AS 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 Hynion AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melhus Sparebank and Hynion AS.
Diversification Opportunities for Melhus Sparebank and Hynion AS
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Melhus and Hynion is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Melhus Sparebank and Hynion AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hynion 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 Hynion AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hynion AS has no effect on the direction of Melhus Sparebank i.e., Melhus Sparebank and Hynion AS go up and down completely randomly.
Pair Corralation between Melhus Sparebank and Hynion AS
Assuming the 90 days trading horizon Melhus Sparebank is expected to generate 0.17 times more return on investment than Hynion AS. However, Melhus Sparebank is 5.79 times less risky than Hynion AS. It trades about 0.17 of its potential returns per unit of risk. Hynion AS is currently generating about -0.19 per unit of risk. If you would invest 16,400 in Melhus Sparebank on November 3, 2024 and sell it today you would earn a total of 700.00 from holding Melhus Sparebank or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melhus Sparebank vs. Hynion AS
Performance |
| Timeline |
| Melhus Sparebank |
| Hynion AS |
Melhus Sparebank and Hynion AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melhus Sparebank and Hynion AS
The main advantage of trading using opposite Melhus Sparebank and Hynion AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melhus Sparebank position performs unexpectedly, Hynion AS 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 Hynion AS will offset losses from the drop in Hynion AS's long position.| Melhus Sparebank vs. Sparebank 1 Nord Norge | Melhus Sparebank vs. Aurskog Sparebank | Melhus Sparebank vs. Helgeland Sparebank |
| Hynion AS vs. Helgeland Sparebank | Hynion AS vs. Nordic Mining ASA | Hynion AS vs. Polaris Media | Hynion AS vs. Odfjell Technology |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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