Correlation Between Nidaros Sparebank and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and Kraft Bank 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 Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidaros Sparebank and Kraft Bank Asa, you can compare the effects of market volatilities on Nidaros Sparebank and Kraft Bank 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 Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and Kraft Bank.
Diversification Opportunities for Nidaros Sparebank and Kraft Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nidaros and Kraft is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank 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 Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and Kraft Bank go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and Kraft Bank
Assuming the 90 days trading horizon Nidaros Sparebank is expected to generate 0.07 times more return on investment than Kraft Bank. However, Nidaros Sparebank is 13.47 times less risky than Kraft Bank. It trades about -0.25 of its potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.06 per unit of risk. If you would invest 10,100 in Nidaros Sparebank on September 3, 2024 and sell it today you would lose (100.00) from holding Nidaros Sparebank or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nidaros Sparebank vs. Kraft Bank Asa
Performance |
| Timeline |
| Nidaros Sparebank |
| Kraft Bank Asa |
Nidaros Sparebank and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and Kraft Bank
The main advantage of trading using opposite Nidaros Sparebank and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Nidaros Sparebank vs. DnB ASA | Nidaros Sparebank vs. Sparebank 1 SR | Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebanken Mre |
| Kraft Bank vs. Lea Bank ASA | Kraft Bank vs. Sogn Sparebank | Kraft Bank vs. Bien Sparebank ASA | Kraft Bank vs. Austevoll Seafood ASA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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