Correlation Between Nidaros Sparebank and Beerenberg
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and Beerenberg 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 Nidaros Sparebank and Beerenberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidaros Sparebank and Beerenberg AS, you can compare the effects of market volatilities on Nidaros Sparebank and Beerenberg 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 Nidaros Sparebank with a short position of Beerenberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and Beerenberg.
Diversification Opportunities for Nidaros Sparebank and Beerenberg
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nidaros and Beerenberg is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and Beerenberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beerenberg AS and Nidaros Sparebank 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 Nidaros Sparebank are associated (or correlated) with Beerenberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beerenberg AS has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and Beerenberg go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and Beerenberg
Assuming the 90 days trading horizon Nidaros Sparebank is expected to generate 15.34 times less return on investment than Beerenberg. But when comparing it to its historical volatility, Nidaros Sparebank is 1.31 times less risky than Beerenberg. It trades about 0.01 of its potential returns per unit of risk. Beerenberg AS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,628 in Beerenberg AS on September 1, 2024 and sell it today you would earn a total of 2,472 from holding Beerenberg AS or generate 151.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 64.18% |
| Values | Daily Returns |
Nidaros Sparebank vs. Beerenberg AS
Performance |
| Timeline |
| Nidaros Sparebank |
| Beerenberg AS |
Nidaros Sparebank and Beerenberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and Beerenberg
The main advantage of trading using opposite Nidaros Sparebank and Beerenberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, Beerenberg 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 Beerenberg will offset losses from the drop in Beerenberg's long position.| Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebank 1 Nord Norge | Nidaros Sparebank vs. Sparebanken Vest | Nidaros Sparebank vs. Sparebank 1 Ostfold |
| Beerenberg vs. Sparebanken Ost | Beerenberg vs. Skue Sparebank | Beerenberg vs. Polaris Media | Beerenberg vs. Clean Seas Seafood |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |