Correlation Between Romerike Sparebank and Sparebanken Ost
Can any of the company-specific risk be diversified away by investing in both Romerike Sparebank and Sparebanken Ost 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 Sparebanken Ost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Romerike Sparebank and Sparebanken Ost, you can compare the effects of market volatilities on Romerike Sparebank and Sparebanken Ost 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 Sparebanken Ost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romerike Sparebank and Sparebanken Ost.
Diversification Opportunities for Romerike Sparebank and Sparebanken Ost
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Romerike and Sparebanken is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Romerike Sparebank and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost 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 Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Romerike Sparebank i.e., Romerike Sparebank and Sparebanken Ost go up and down completely randomly.
Pair Corralation between Romerike Sparebank and Sparebanken Ost
Assuming the 90 days trading horizon Romerike Sparebank is expected to generate 0.64 times more return on investment than Sparebanken Ost. However, Romerike Sparebank is 1.56 times less risky than Sparebanken Ost. It trades about 0.28 of its potential returns per unit of risk. Sparebanken Ost is currently generating about 0.09 per unit of risk. If you would invest 12,400 in Romerike Sparebank on September 5, 2024 and sell it today you would earn a total of 850.00 from holding Romerike Sparebank or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Romerike Sparebank vs. Sparebanken Ost
Performance |
| Timeline |
| Romerike Sparebank |
| Sparebanken Ost |
Romerike Sparebank and Sparebanken Ost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Romerike Sparebank and Sparebanken Ost
The main advantage of trading using opposite Romerike Sparebank and Sparebanken Ost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Romerike Sparebank position performs unexpectedly, Sparebanken Ost 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 Sparebanken Ost will offset losses from the drop in Sparebanken Ost's long position.| Romerike Sparebank vs. Austevoll Seafood ASA | Romerike Sparebank vs. Dolphin Drilling AS | Romerike Sparebank vs. Xplora Technologies As | Romerike Sparebank vs. Arcticzymes Technologies ASA |
| Sparebanken Ost vs. Austevoll Seafood ASA | Sparebanken Ost vs. Napatech AS | Sparebanken Ost vs. Romerike Sparebank | Sparebanken Ost vs. Grieg Seafood 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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