Correlation Between Romerike Sparebank and Petronor
Can any of the company-specific risk be diversified away by investing in both Romerike Sparebank and Petronor 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 Romerike Sparebank and Petronor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Romerike Sparebank and Petronor EP, you can compare the effects of market volatilities on Romerike Sparebank and Petronor 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 Romerike Sparebank with a short position of Petronor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romerike Sparebank and Petronor.
Diversification Opportunities for Romerike Sparebank and Petronor
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Romerike and Petronor is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Romerike Sparebank and Petronor EP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronor EP and Romerike Sparebank 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 Romerike Sparebank are associated (or correlated) with Petronor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronor EP has no effect on the direction of Romerike Sparebank i.e., Romerike Sparebank and Petronor go up and down completely randomly.
Pair Corralation between Romerike Sparebank and Petronor
Assuming the 90 days trading horizon Romerike Sparebank is expected to generate 0.97 times more return on investment than Petronor. However, Romerike Sparebank is 1.03 times less risky than Petronor. It trades about 0.08 of its potential returns per unit of risk. Petronor EP is currently generating about -0.35 per unit of risk. If you would invest 13,200 in Romerike Sparebank on December 1, 2024 and sell it today you would earn a total of 400.00 from holding Romerike Sparebank or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Romerike Sparebank vs. Petronor EP
Performance |
| Timeline |
| Romerike Sparebank |
| Petronor EP |
Romerike Sparebank and Petronor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Romerike Sparebank and Petronor
The main advantage of trading using opposite Romerike Sparebank and Petronor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Romerike Sparebank position performs unexpectedly, Petronor 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 Petronor will offset losses from the drop in Petronor's long position.| Romerike Sparebank vs. Proximar Seafood AS | Romerike Sparebank vs. Sparebank 1 SMN | Romerike Sparebank vs. Austevoll Seafood ASA | Romerike Sparebank vs. Sparebanken Ost |
| Petronor vs. Aurskog Sparebank | Petronor vs. Arcticzymes Technologies ASA | Petronor vs. SD Standard Drilling | Petronor vs. Nordic Mining 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 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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