Correlation Between Sparebank and Havila Shipping
Can any of the company-specific risk be diversified away by investing in both Sparebank and Havila Shipping 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 Sparebank and Havila Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SMN and Havila Shipping ASA, you can compare the effects of market volatilities on Sparebank and Havila Shipping 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 Sparebank with a short position of Havila Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Havila Shipping.
Diversification Opportunities for Sparebank and Havila Shipping
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebank and Havila is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SMN and Havila Shipping ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havila Shipping ASA and 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 Sparebank 1 SMN are associated (or correlated) with Havila Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havila Shipping ASA has no effect on the direction of Sparebank i.e., Sparebank and Havila Shipping go up and down completely randomly.
Pair Corralation between Sparebank and Havila Shipping
Assuming the 90 days trading horizon Sparebank 1 SMN is expected to generate 0.32 times more return on investment than Havila Shipping. However, Sparebank 1 SMN is 3.14 times less risky than Havila Shipping. It trades about 0.05 of its potential returns per unit of risk. Havila Shipping ASA is currently generating about -0.15 per unit of risk. If you would invest 16,236 in Sparebank 1 SMN on September 1, 2024 and sell it today you would earn a total of 174.00 from holding Sparebank 1 SMN or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sparebank 1 SMN vs. Havila Shipping ASA
Performance |
| Timeline |
| Sparebank 1 SMN |
| Havila Shipping ASA |
Sparebank and Havila Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Havila Shipping
The main advantage of trading using opposite Sparebank and Havila Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Havila Shipping 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 Havila Shipping will offset losses from the drop in Havila Shipping's long position.| Sparebank vs. Sparebank 1 Nord Norge | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA |
| Havila Shipping vs. Solstad Offsho | Havila Shipping vs. Eidesvik Offshore ASA | Havila Shipping vs. Prosafe SE | Havila Shipping vs. BW Offshore |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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