Correlation Between Nidaros Sparebank and Instabank ASA
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and Instabank ASA 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 Instabank ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidaros Sparebank and Instabank ASA, you can compare the effects of market volatilities on Nidaros Sparebank and Instabank ASA 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 Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and Instabank ASA.
Diversification Opportunities for Nidaros Sparebank and Instabank ASA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nidaros and Instabank is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA 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 Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and Instabank ASA go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and Instabank ASA
Assuming the 90 days trading horizon Nidaros Sparebank is expected to under-perform the Instabank ASA. But the stock apears to be less risky and, when comparing its historical volatility, Nidaros Sparebank is 1.33 times less risky than Instabank ASA. The stock trades about 0.0 of its potential returns per unit of risk. The Instabank ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Instabank ASA on September 12, 2024 and sell it today you would earn a total of 35.00 from holding Instabank ASA or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Nidaros Sparebank vs. Instabank ASA
Performance |
| Timeline |
| Nidaros Sparebank |
| Instabank ASA |
Nidaros Sparebank and Instabank ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and Instabank ASA
The main advantage of trading using opposite Nidaros Sparebank and Instabank ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, Instabank ASA 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 Instabank ASA will offset losses from the drop in Instabank ASA's long position.| Nidaros Sparebank vs. DnB ASA | Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebanken Mre | Nidaros Sparebank vs. Sparebank 1 Ostfold |
| Instabank ASA vs. DnB ASA | Instabank ASA vs. Sparebank 1 SMN | Instabank ASA vs. Sparebanken Mre | Instabank ASA vs. Sparebank 1 Ostfold |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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