Correlation Between Sparebanken Mre and Sparebank
Can any of the company-specific risk be diversified away by investing in both Sparebanken Mre and Sparebank 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 Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Mre and Sparebank 1 Ostfold, you can compare the effects of market volatilities on Sparebanken Mre and Sparebank 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 Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Mre and Sparebank.
Diversification Opportunities for Sparebanken Mre and Sparebank
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sparebanken and Sparebank is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Mre and Sparebank 1 Ostfold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 Ostfold 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 Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 Ostfold has no effect on the direction of Sparebanken Mre i.e., Sparebanken Mre and Sparebank go up and down completely randomly.
Pair Corralation between Sparebanken Mre and Sparebank
Assuming the 90 days trading horizon Sparebanken Mre is expected to generate 1.85 times more return on investment than Sparebank. However, Sparebanken Mre is 1.85 times more volatile than Sparebank 1 Ostfold. It trades about -0.02 of its potential returns per unit of risk. Sparebank 1 Ostfold is currently generating about -0.06 per unit of risk. If you would invest 8,904 in Sparebanken Mre on September 1, 2024 and sell it today you would lose (91.00) from holding Sparebanken Mre or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sparebanken Mre vs. Sparebank 1 Ostfold
Performance |
| Timeline |
| Sparebanken Mre |
| Sparebank 1 Ostfold |
Sparebanken Mre and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Mre and Sparebank
The main advantage of trading using opposite Sparebanken Mre and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Mre position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank'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 |
| Sparebank vs. DnB ASA | Sparebank vs. Gjensidige Forsikring ASA | Sparebank vs. Orkla ASA | Sparebank vs. Telenor 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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