Correlation Between NorAm Drilling and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both NorAm Drilling and Jaeren 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 NorAm Drilling and Jaeren Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorAm Drilling AS and Jaeren Sparebank, you can compare the effects of market volatilities on NorAm Drilling and Jaeren 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 NorAm Drilling with a short position of Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorAm Drilling and Jaeren Sparebank.
Diversification Opportunities for NorAm Drilling and Jaeren Sparebank
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between NorAm and Jaeren is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding NorAm Drilling AS and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank and NorAm Drilling 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 NorAm Drilling AS are associated (or correlated) with Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of NorAm Drilling i.e., NorAm Drilling and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between NorAm Drilling and Jaeren Sparebank
Assuming the 90 days trading horizon NorAm Drilling AS is expected to under-perform the Jaeren Sparebank. In addition to that, NorAm Drilling is 1.24 times more volatile than Jaeren Sparebank. It trades about -0.21 of its total potential returns per unit of risk. Jaeren Sparebank is currently generating about -0.01 per unit of volatility. If you would invest 31,600 in Jaeren Sparebank on August 25, 2024 and sell it today you would lose (100.00) from holding Jaeren Sparebank or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NorAm Drilling AS vs. Jaeren Sparebank
Performance |
| Timeline |
| NorAm Drilling AS |
| Jaeren Sparebank |
NorAm Drilling and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorAm Drilling and Jaeren Sparebank
The main advantage of trading using opposite NorAm Drilling and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorAm Drilling position performs unexpectedly, Jaeren 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank's long position.| NorAm Drilling vs. Subsea 7 SA | NorAm Drilling vs. Aker ASA | NorAm Drilling vs. Dno ASA | NorAm Drilling vs. Aker Carbon Capture |
| Jaeren Sparebank vs. DnB ASA | Jaeren Sparebank vs. Sparebank 1 SR | Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Sparebanken Mre |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Correlations Find global opportunities by holding instruments from different markets |