Correlation Between Nidaros Sparebank and Sunndal Sparebank
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and Sunndal 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 Sunndal 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 Sunndal Sparebank, you can compare the effects of market volatilities on Nidaros Sparebank and Sunndal 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 Sunndal Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and Sunndal Sparebank.
Diversification Opportunities for Nidaros Sparebank and Sunndal Sparebank
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nidaros and Sunndal is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and Sunndal Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunndal 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 Sunndal Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunndal Sparebank has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and Sunndal Sparebank go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and Sunndal Sparebank
Assuming the 90 days trading horizon Nidaros Sparebank is expected to under-perform the Sunndal Sparebank. In addition to that, Nidaros Sparebank is 1.33 times more volatile than Sunndal Sparebank. It trades about 0.0 of its total potential returns per unit of risk. Sunndal Sparebank is currently generating about 0.0 per unit of volatility. If you would invest 11,654 in Sunndal Sparebank on August 24, 2024 and sell it today you would lose (74.00) from holding Sunndal Sparebank or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nidaros Sparebank vs. Sunndal Sparebank
Performance |
| Timeline |
| Nidaros Sparebank |
| Sunndal Sparebank |
Nidaros Sparebank and Sunndal Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and Sunndal Sparebank
The main advantage of trading using opposite Nidaros Sparebank and Sunndal Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, Sunndal 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 Sunndal Sparebank will offset losses from the drop in Sunndal Sparebank'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 |
| Sunndal Sparebank vs. Lery Seafood Group | Sunndal Sparebank vs. Proximar Seafood AS | Sunndal Sparebank vs. Norwegian Air Shuttle | Sunndal Sparebank vs. Waste Plastic Upcycling |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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