Correlation Between Melhus Sparebank and Tekna Holding
Can any of the company-specific risk be diversified away by investing in both Melhus Sparebank and Tekna Holding 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 Tekna Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melhus Sparebank and Tekna Holding AS, you can compare the effects of market volatilities on Melhus Sparebank and Tekna Holding 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 Tekna Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melhus Sparebank and Tekna Holding.
Diversification Opportunities for Melhus Sparebank and Tekna Holding
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Melhus and Tekna is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Melhus Sparebank and Tekna Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekna Holding 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 Tekna Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekna Holding AS has no effect on the direction of Melhus Sparebank i.e., Melhus Sparebank and Tekna Holding go up and down completely randomly.
Pair Corralation between Melhus Sparebank and Tekna Holding
Assuming the 90 days trading horizon Melhus Sparebank is expected to generate 0.16 times more return on investment than Tekna Holding. However, Melhus Sparebank is 6.3 times less risky than Tekna Holding. It trades about 0.09 of its potential returns per unit of risk. Tekna Holding AS is currently generating about -0.16 per unit of risk. If you would invest 15,698 in Melhus Sparebank on August 29, 2024 and sell it today you would earn a total of 452.00 from holding Melhus Sparebank or generate 2.88% 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. Tekna Holding AS
Performance |
| Timeline |
| Melhus Sparebank |
| Tekna Holding AS |
Melhus Sparebank and Tekna Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melhus Sparebank and Tekna Holding
The main advantage of trading using opposite Melhus Sparebank and Tekna Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melhus Sparebank position performs unexpectedly, Tekna Holding 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 Tekna Holding will offset losses from the drop in Tekna Holding's long position.| Melhus Sparebank vs. Sparebank 1 Nord Norge | Melhus Sparebank vs. Aurskog Sparebank | Melhus Sparebank vs. Helgeland Sparebank |
| Tekna Holding vs. Melhus Sparebank | Tekna Holding vs. Xplora Technologies As | Tekna Holding vs. Sogn Sparebank | Tekna Holding vs. Kraft Bank 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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