Correlation Between Pareto Bank and Selvaag Bolig
Can any of the company-specific risk be diversified away by investing in both Pareto Bank and Selvaag Bolig 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 Selvaag Bolig 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 Selvaag Bolig ASA, you can compare the effects of market volatilities on Pareto Bank and Selvaag Bolig 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 Selvaag Bolig. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pareto Bank and Selvaag Bolig.
Diversification Opportunities for Pareto Bank and Selvaag Bolig
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pareto and Selvaag is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Pareto Bank ASA and Selvaag Bolig ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selvaag Bolig ASA 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 Selvaag Bolig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selvaag Bolig ASA has no effect on the direction of Pareto Bank i.e., Pareto Bank and Selvaag Bolig go up and down completely randomly.
Pair Corralation between Pareto Bank and Selvaag Bolig
Assuming the 90 days trading horizon Pareto Bank ASA is expected to under-perform the Selvaag Bolig. But the stock apears to be less risky and, when comparing its historical volatility, Pareto Bank ASA is 1.48 times less risky than Selvaag Bolig. The stock trades about 0.0 of its potential returns per unit of risk. The Selvaag Bolig ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,295 in Selvaag Bolig ASA on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Selvaag Bolig ASA or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pareto Bank ASA vs. Selvaag Bolig ASA
Performance |
| Timeline |
| Pareto Bank ASA |
| Selvaag Bolig ASA |
Pareto Bank and Selvaag Bolig Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pareto Bank and Selvaag Bolig
The main advantage of trading using opposite Pareto Bank and Selvaag Bolig positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pareto Bank position performs unexpectedly, Selvaag Bolig 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 Selvaag Bolig will offset losses from the drop in Selvaag Bolig's long position.| Pareto Bank vs. Sparebank 1 SMN | Pareto Bank vs. Storebrand ASA | Pareto Bank vs. DnB ASA | Pareto Bank vs. Europris ASA |
| Selvaag Bolig vs. Veidekke ASA | Selvaag Bolig vs. Entra ASA | Selvaag Bolig vs. Kid ASA | Selvaag Bolig vs. Olav Thon Eien |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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