Correlation Between Sparebanken Mre and Holand Og
Can any of the company-specific risk be diversified away by investing in both Sparebanken Mre and Holand Og 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 Holand Og into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Mre and Holand og Setskog, you can compare the effects of market volatilities on Sparebanken Mre and Holand Og 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 Holand Og. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Mre and Holand Og.
Diversification Opportunities for Sparebanken Mre and Holand Og
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sparebanken and Holand is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Mre and Holand og Setskog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holand og Setskog 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 Holand Og. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holand og Setskog has no effect on the direction of Sparebanken Mre i.e., Sparebanken Mre and Holand Og go up and down completely randomly.
Pair Corralation between Sparebanken Mre and Holand Og
Assuming the 90 days trading horizon Sparebanken Mre is expected to under-perform the Holand Og. But the stock apears to be less risky and, when comparing its historical volatility, Sparebanken Mre is 3.24 times less risky than Holand Og. The stock trades about -0.02 of its potential returns per unit of risk. The Holand og Setskog is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12,500 in Holand og Setskog on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Holand og Setskog or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebanken Mre vs. Holand og Setskog
Performance |
| Timeline |
| Sparebanken Mre |
| Holand og Setskog |
Sparebanken Mre and Holand Og Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Mre and Holand Og
The main advantage of trading using opposite Sparebanken Mre and Holand Og positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Mre position performs unexpectedly, Holand Og 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 Holand Og will offset losses from the drop in Holand Og'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 |
| Holand Og vs. Melhus Sparebank | Holand Og vs. Aurskog Sparebank | Holand Og vs. Sparebanken Sor | Holand Og vs. Sparebank 1 Ringerike |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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