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 Ostfold, 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 -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Napatech AS 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 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 Ostfold 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 under-perform the Sparebank. In addition to that, Napatech is 2.25 times more volatile than Sparebank 1 Ostfold. It trades about -0.25 of its total potential returns per unit of risk. Sparebank 1 Ostfold is currently generating about 0.05 per unit of volatility. If you would invest 36,700 in Sparebank 1 Ostfold on September 13, 2024 and sell it today you would earn a total of 800.00 from holding Sparebank 1 Ostfold or generate 2.18% 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 Ostfold
Performance |
| Timeline |
| Napatech AS |
| Sparebank 1 Ostfold |
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 Nord Norge | Sparebank vs. Sparebank 1 SMN | Sparebank vs. Sparebanken Vest | Sparebank vs. Sparebanken Mre |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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