Correlation Between Romsdal Sparebank and SpareBank
Can any of the company-specific risk be diversified away by investing in both Romsdal Sparebank and 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 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 SpareBank 1 stlandet, you can compare the effects of market volatilities on Romsdal Sparebank and 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 SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romsdal Sparebank and SpareBank.
Diversification Opportunities for Romsdal Sparebank and SpareBank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Romsdal and SpareBank is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Romsdal Sparebank and SpareBank 1 stlandet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 stlandet 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 SpareBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpareBank 1 stlandet has no effect on the direction of Romsdal Sparebank i.e., Romsdal Sparebank and SpareBank go up and down completely randomly.
Pair Corralation between Romsdal Sparebank and SpareBank
Assuming the 90 days trading horizon Romsdal Sparebank is expected to generate 33.19 times less return on investment than SpareBank. In addition to that, Romsdal Sparebank is 1.3 times more volatile than SpareBank 1 stlandet. It trades about 0.01 of its total potential returns per unit of risk. SpareBank 1 stlandet is currently generating about 0.25 per unit of volatility. If you would invest 15,724 in SpareBank 1 stlandet on November 3, 2024 and sell it today you would earn a total of 980.00 from holding SpareBank 1 stlandet or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Romsdal Sparebank vs. SpareBank 1 stlandet
Performance |
| Timeline |
| Romsdal Sparebank |
| SpareBank 1 stlandet |
Romsdal Sparebank and SpareBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Romsdal Sparebank and SpareBank
The main advantage of trading using opposite Romsdal Sparebank and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Romsdal Sparebank position performs unexpectedly, 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 SpareBank will offset losses from the drop in SpareBank's long position.| Romsdal Sparebank vs. Nordhealth AS | Romsdal Sparebank vs. SD Standard Drilling | Romsdal Sparebank vs. Helgeland Sparebank | Romsdal Sparebank vs. Sunndal Sparebank |
| SpareBank vs. Sparebank 1 SMN | SpareBank vs. Sparebank 1 Nord Norge | SpareBank vs. Sparebanken Vest | SpareBank vs. Pareto Bank 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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