Correlation Between Sparebank and Proximar Seafood
Can any of the company-specific risk be diversified away by investing in both Sparebank and Proximar Seafood 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 Proximar Seafood 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 Proximar Seafood AS, you can compare the effects of market volatilities on Sparebank and Proximar Seafood 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 Proximar Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Proximar Seafood.
Diversification Opportunities for Sparebank and Proximar Seafood
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sparebank and Proximar is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SMN and Proximar Seafood AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximar Seafood 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 Proximar Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximar Seafood has no effect on the direction of Sparebank i.e., Sparebank and Proximar Seafood go up and down completely randomly.
Pair Corralation between Sparebank and Proximar Seafood
Assuming the 90 days trading horizon Sparebank 1 SMN is expected to generate 0.44 times more return on investment than Proximar Seafood. However, Sparebank 1 SMN is 2.26 times less risky than Proximar Seafood. It trades about 0.49 of its potential returns per unit of risk. Proximar Seafood AS is currently generating about 0.03 per unit of risk. If you would invest 16,838 in Sparebank 1 SMN on October 24, 2024 and sell it today you would earn a total of 1,066 from holding Sparebank 1 SMN or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 SMN vs. Proximar Seafood AS
Performance |
| Timeline |
| Sparebank 1 SMN |
| Proximar Seafood |
Sparebank and Proximar Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Proximar Seafood
The main advantage of trading using opposite Sparebank and Proximar Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Proximar Seafood 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 Proximar Seafood will offset losses from the drop in Proximar Seafood's long position.| Sparebank vs. Sparebank 1 Nord Norge | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA |
| Proximar Seafood vs. Melhus Sparebank | Proximar Seafood vs. Romsdal Sparebank | Proximar Seafood vs. Pareto Bank ASA | Proximar Seafood vs. Aasen 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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