Correlation Between Sparebanken Mre and Gigante Salmon
Can any of the company-specific risk be diversified away by investing in both Sparebanken Mre and Gigante Salmon 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 Sparebanken Mre and Gigante Salmon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Mre and Gigante Salmon AS, you can compare the effects of market volatilities on Sparebanken Mre and Gigante Salmon 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 Sparebanken Mre with a short position of Gigante Salmon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Mre and Gigante Salmon.
Diversification Opportunities for Sparebanken Mre and Gigante Salmon
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sparebanken and Gigante is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Mre and Gigante Salmon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigante Salmon AS and Sparebanken Mre 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 Sparebanken Mre are associated (or correlated) with Gigante Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigante Salmon AS has no effect on the direction of Sparebanken Mre i.e., Sparebanken Mre and Gigante Salmon go up and down completely randomly.
Pair Corralation between Sparebanken Mre and Gigante Salmon
Assuming the 90 days trading horizon Sparebanken Mre is expected to generate 2.26 times less return on investment than Gigante Salmon. But when comparing it to its historical volatility, Sparebanken Mre is 1.47 times less risky than Gigante Salmon. It trades about 0.08 of its potential returns per unit of risk. Gigante Salmon AS is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 810.00 in Gigante Salmon AS on November 2, 2024 and sell it today you would earn a total of 28.00 from holding Gigante Salmon AS or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sparebanken Mre vs. Gigante Salmon AS
Performance |
| Timeline |
| Sparebanken Mre |
| Gigante Salmon AS |
Sparebanken Mre and Gigante Salmon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Mre and Gigante Salmon
The main advantage of trading using opposite Sparebanken Mre and Gigante Salmon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Mre position performs unexpectedly, Gigante Salmon 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 Gigante Salmon will offset losses from the drop in Gigante Salmon's long position.| Sparebanken Mre vs. Sparebank 1 SMN | Sparebanken Mre vs. Sparebank 1 Nord Norge | Sparebanken Mre vs. Sparebanken Vest | Sparebanken Mre vs. Sparebank 1 Ostfold |
| Gigante Salmon vs. Andfjord Salmon AS | Gigante Salmon vs. Salmon Evolution Holding | Gigante Salmon vs. Biofish Holding AS | Gigante Salmon vs. Nordic Aqua Partners |
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 Stocks Directory module to find actively traded stocks across global markets.
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