Correlation Between Romsdal Sparebank and Romerike Sparebank
Can any of the company-specific risk be diversified away by investing in both Romsdal Sparebank and Romerike 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 Romsdal Sparebank and Romerike Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Romsdal Sparebank and Romerike Sparebank, you can compare the effects of market volatilities on Romsdal Sparebank and Romerike 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 Romsdal Sparebank with a short position of Romerike Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romsdal Sparebank and Romerike Sparebank.
Diversification Opportunities for Romsdal Sparebank and Romerike Sparebank
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Romsdal and Romerike is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Romsdal Sparebank and Romerike Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Romerike Sparebank and Romsdal 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 Romsdal Sparebank are associated (or correlated) with Romerike Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Romerike Sparebank has no effect on the direction of Romsdal Sparebank i.e., Romsdal Sparebank and Romerike Sparebank go up and down completely randomly.
Pair Corralation between Romsdal Sparebank and Romerike Sparebank
Assuming the 90 days trading horizon Romsdal Sparebank is expected to under-perform the Romerike Sparebank. But the stock apears to be less risky and, when comparing its historical volatility, Romsdal Sparebank is 1.2 times less risky than Romerike Sparebank. The stock trades about -0.13 of its potential returns per unit of risk. The Romerike Sparebank is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,400 in Romerike Sparebank on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Romerike Sparebank or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Romsdal Sparebank vs. Romerike Sparebank
Performance |
| Timeline |
| Romsdal Sparebank |
| Romerike Sparebank |
Romsdal Sparebank and Romerike Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Romsdal Sparebank and Romerike Sparebank
The main advantage of trading using opposite Romsdal Sparebank and Romerike Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Romsdal Sparebank position performs unexpectedly, Romerike 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 Romerike Sparebank will offset losses from the drop in Romerike Sparebank's long position.| Romsdal Sparebank vs. Clean Seas Seafood | Romsdal Sparebank vs. Nordic Technology Group | Romsdal Sparebank vs. Odfjell Technology | Romsdal Sparebank vs. Gaming Innovation Group |
| Romerike Sparebank vs. Goodtech | Romerike Sparebank vs. Xplora Technologies As | Romerike Sparebank vs. Sparebank 1 SMN | Romerike Sparebank vs. Jaeren Sparebank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |