Correlation Between Napatech and Sparebank
Can any of the company-specific risk be diversified away by investing in both Napatech 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 Napatech and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Napatech AS and Sparebank 1 Nord Norge, you can compare the effects of market volatilities on Napatech 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 Napatech with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Napatech and Sparebank.
Diversification Opportunities for Napatech and Sparebank
Pay attention - limited upside
The 3 months correlation between Napatech and Sparebank is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS and Sparebank 1 Nord Norge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 Nord and Napatech 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 Napatech AS 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 Nord has no effect on the direction of Napatech i.e., Napatech and Sparebank go up and down completely randomly.
Pair Corralation between Napatech and Sparebank
Assuming the 90 days trading horizon Napatech AS is expected to generate 3.22 times more return on investment than Sparebank. However, Napatech is 3.22 times more volatile than Sparebank 1 Nord Norge. It trades about 0.07 of its potential returns per unit of risk. Sparebank 1 Nord Norge is currently generating about 0.09 per unit of risk. If you would invest 1,325 in Napatech AS on September 14, 2024 and sell it today you would earn a total of 925.00 from holding Napatech AS or generate 69.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Napatech AS vs. Sparebank 1 Nord Norge
Performance |
| Timeline |
| Napatech AS |
| Sparebank 1 Nord |
Napatech and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Napatech and Sparebank
The main advantage of trading using opposite Napatech and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Napatech 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.| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
| Sparebank vs. Sparebank 1 SMN | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. SpareBank 1 stlandet |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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