Correlation Between Nidaros Sparebank and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and Grong 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 Nidaros Sparebank and Grong Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidaros Sparebank and Grong Sparebank, you can compare the effects of market volatilities on Nidaros Sparebank and Grong 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 Nidaros Sparebank with a short position of Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and Grong Sparebank.
Diversification Opportunities for Nidaros Sparebank and Grong Sparebank
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nidaros and Grong is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank 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 Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and Grong Sparebank go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and Grong Sparebank
Assuming the 90 days trading horizon Nidaros Sparebank is expected to generate 3.1 times more return on investment than Grong Sparebank. However, Nidaros Sparebank is 3.1 times more volatile than Grong Sparebank. It trades about 0.12 of its potential returns per unit of risk. Grong Sparebank is currently generating about 0.11 per unit of risk. If you would invest 10,102 in Nidaros Sparebank on October 23, 2024 and sell it today you would earn a total of 298.00 from holding Nidaros Sparebank or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Nidaros Sparebank vs. Grong Sparebank
Performance |
| Timeline |
| Nidaros Sparebank |
| Grong Sparebank |
Nidaros Sparebank and Grong Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and Grong Sparebank
The main advantage of trading using opposite Nidaros Sparebank and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, Grong 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.| Nidaros Sparebank vs. Nordic Mining ASA | Nidaros Sparebank vs. Sogn Sparebank | Nidaros Sparebank vs. Romerike Sparebank | Nidaros Sparebank vs. Sparebank 1 SMN |
| Grong Sparebank vs. Kraft Bank Asa | Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Pareto Bank ASA | Grong Sparebank vs. Goodtech |
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 Positions Ratings module to 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.
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