Correlation Between Pareto Bank and Green Minerals
Can any of the company-specific risk be diversified away by investing in both Pareto Bank and Green Minerals 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 Pareto Bank and Green Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pareto Bank ASA and Green Minerals AS, you can compare the effects of market volatilities on Pareto Bank and Green Minerals 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 Pareto Bank with a short position of Green Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pareto Bank and Green Minerals.
Diversification Opportunities for Pareto Bank and Green Minerals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pareto and Green is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pareto Bank ASA and Green Minerals AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Minerals AS and Pareto Bank 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 Pareto Bank ASA are associated (or correlated) with Green Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Minerals AS has no effect on the direction of Pareto Bank i.e., Pareto Bank and Green Minerals go up and down completely randomly.
Pair Corralation between Pareto Bank and Green Minerals
Assuming the 90 days trading horizon Pareto Bank is expected to generate 3.3 times less return on investment than Green Minerals. But when comparing it to its historical volatility, Pareto Bank ASA is 3.3 times less risky than Green Minerals. It trades about 0.3 of its potential returns per unit of risk. Green Minerals AS is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 321.00 in Green Minerals AS on October 23, 2024 and sell it today you would earn a total of 64.00 from holding Green Minerals AS or generate 19.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Pareto Bank ASA vs. Green Minerals AS
Performance |
| Timeline |
| Pareto Bank ASA |
| Green Minerals AS |
Pareto Bank and Green Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pareto Bank and Green Minerals
The main advantage of trading using opposite Pareto Bank and Green Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pareto Bank position performs unexpectedly, Green Minerals 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 Green Minerals will offset losses from the drop in Green Minerals' long position.| Pareto Bank vs. Sparebank 1 SMN | Pareto Bank vs. Storebrand ASA | Pareto Bank vs. DnB ASA | Pareto Bank vs. Europris ASA |
| Green Minerals vs. Sogn Sparebank | Green Minerals vs. Nidaros Sparebank | Green Minerals vs. Pareto Bank ASA | Green Minerals vs. Kraft Bank 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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