Correlation Between Selvaag Bolig and Entra ASA
Can any of the company-specific risk be diversified away by investing in both Selvaag Bolig and Entra ASA 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 Selvaag Bolig and Entra ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selvaag Bolig ASA and Entra ASA, you can compare the effects of market volatilities on Selvaag Bolig and Entra ASA 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 Selvaag Bolig with a short position of Entra ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selvaag Bolig and Entra ASA.
Diversification Opportunities for Selvaag Bolig and Entra ASA
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Selvaag and Entra is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Selvaag Bolig ASA and Entra ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entra ASA and Selvaag Bolig 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 Selvaag Bolig ASA are associated (or correlated) with Entra ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entra ASA has no effect on the direction of Selvaag Bolig i.e., Selvaag Bolig and Entra ASA go up and down completely randomly.
Pair Corralation between Selvaag Bolig and Entra ASA
Assuming the 90 days trading horizon Selvaag Bolig is expected to generate 1.51 times less return on investment than Entra ASA. But when comparing it to its historical volatility, Selvaag Bolig ASA is 1.0 times less risky than Entra ASA. It trades about 0.07 of its potential returns per unit of risk. Entra ASA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11,660 in Entra ASA on September 1, 2024 and sell it today you would earn a total of 480.00 from holding Entra ASA or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selvaag Bolig ASA vs. Entra ASA
Performance |
| Timeline |
| Selvaag Bolig ASA |
| Entra ASA |
Selvaag Bolig and Entra ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selvaag Bolig and Entra ASA
The main advantage of trading using opposite Selvaag Bolig and Entra ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selvaag Bolig position performs unexpectedly, Entra ASA 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 Entra ASA will offset losses from the drop in Entra ASA's long position.| Selvaag Bolig vs. Veidekke ASA | Selvaag Bolig vs. Entra ASA | Selvaag Bolig vs. Kid ASA | Selvaag Bolig vs. Olav Thon Eien |
| Entra ASA vs. Gjensidige Forsikring ASA | Entra ASA vs. Storebrand ASA | Entra ASA vs. Olav Thon Eien | Entra ASA vs. DnB 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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