Correlation Between Polaris Media and Bien Sparebank
Can any of the company-specific risk be diversified away by investing in both Polaris Media and Bien 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 Polaris Media and Bien Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polaris Media and Bien Sparebank ASA, you can compare the effects of market volatilities on Polaris Media and Bien 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 Polaris Media with a short position of Bien Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Media and Bien Sparebank.
Diversification Opportunities for Polaris Media and Bien Sparebank
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Polaris and Bien is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Media and Bien Sparebank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bien Sparebank ASA and Polaris Media 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 Polaris Media are associated (or correlated) with Bien Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bien Sparebank ASA has no effect on the direction of Polaris Media i.e., Polaris Media and Bien Sparebank go up and down completely randomly.
Pair Corralation between Polaris Media and Bien Sparebank
Assuming the 90 days trading horizon Polaris Media is expected to generate 4.71 times less return on investment than Bien Sparebank. But when comparing it to its historical volatility, Polaris Media is 1.13 times less risky than Bien Sparebank. It trades about 0.05 of its potential returns per unit of risk. Bien Sparebank ASA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 12,900 in Bien Sparebank ASA on November 27, 2024 and sell it today you would earn a total of 1,400 from holding Bien Sparebank ASA or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Media vs. Bien Sparebank ASA
Performance |
| Timeline |
| Polaris Media |
| Bien Sparebank ASA |
Polaris Media and Bien Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Media and Bien Sparebank
The main advantage of trading using opposite Polaris Media and Bien Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Media position performs unexpectedly, Bien 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 Bien Sparebank will offset losses from the drop in Bien Sparebank's long position.| Polaris Media vs. Kid ASA | Polaris Media vs. Byggma | Polaris Media vs. American Shipping | Polaris Media vs. Kitron ASA |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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