Correlation Between Ocean Sun and Lea Bank
Can any of the company-specific risk be diversified away by investing in both Ocean Sun and Lea 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 Ocean Sun and Lea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Sun As and Lea Bank ASA, you can compare the effects of market volatilities on Ocean Sun and Lea 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 Ocean Sun with a short position of Lea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Sun and Lea Bank.
Diversification Opportunities for Ocean Sun and Lea Bank
Very good diversification
The 3 months correlation between Ocean and Lea is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Sun As and Lea Bank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lea Bank ASA and Ocean Sun 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 Ocean Sun As are associated (or correlated) with Lea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lea Bank ASA has no effect on the direction of Ocean Sun i.e., Ocean Sun and Lea Bank go up and down completely randomly.
Pair Corralation between Ocean Sun and Lea Bank
Assuming the 90 days trading horizon Ocean Sun As is expected to under-perform the Lea Bank. In addition to that, Ocean Sun is 1.96 times more volatile than Lea Bank ASA. It trades about -0.02 of its total potential returns per unit of risk. Lea Bank ASA is currently generating about 0.34 per unit of volatility. If you would invest 815.00 in Lea Bank ASA on September 12, 2024 and sell it today you would earn a total of 175.00 from holding Lea Bank ASA or generate 21.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Sun As vs. Lea Bank ASA
Performance |
| Timeline |
| Ocean Sun As |
| Lea Bank ASA |
Ocean Sun and Lea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Sun and Lea Bank
The main advantage of trading using opposite Ocean Sun and Lea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Sun position performs unexpectedly, Lea 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 Lea Bank will offset losses from the drop in Lea Bank's long position.| Ocean Sun vs. Bonheur | Ocean Sun vs. Kongsberg Gruppen ASA | Ocean Sun vs. Napatech AS | Ocean Sun vs. Elkem ASA |
| Lea Bank vs. Bien Sparebank ASA | Lea Bank vs. Romerike Sparebank | Lea Bank vs. Kongsberg Gruppen ASA | Lea Bank vs. Napatech AS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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