Correlation Between Selvaag Bolig and Wilh Wilhelmsen
Can any of the company-specific risk be diversified away by investing in both Selvaag Bolig and Wilh Wilhelmsen 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 Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding, you can compare the effects of market volatilities on Selvaag Bolig and Wilh Wilhelmsen 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 Wilh Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selvaag Bolig and Wilh Wilhelmsen.
Diversification Opportunities for Selvaag Bolig and Wilh Wilhelmsen
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Selvaag and Wilh is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Selvaag Bolig ASA and Wilh Wilhelmsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilh Wilhelmsen Holding 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 Wilh Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilh Wilhelmsen Holding has no effect on the direction of Selvaag Bolig i.e., Selvaag Bolig and Wilh Wilhelmsen go up and down completely randomly.
Pair Corralation between Selvaag Bolig and Wilh Wilhelmsen
Assuming the 90 days trading horizon Selvaag Bolig ASA is expected to under-perform the Wilh Wilhelmsen. But the stock apears to be less risky and, when comparing its historical volatility, Selvaag Bolig ASA is 1.2 times less risky than Wilh Wilhelmsen. The stock trades about -0.14 of its potential returns per unit of risk. The Wilh Wilhelmsen Holding is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 43,697 in Wilh Wilhelmsen Holding on August 29, 2024 and sell it today you would lose (1,947) from holding Wilh Wilhelmsen Holding or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selvaag Bolig ASA vs. Wilh Wilhelmsen Holding
Performance |
| Timeline |
| Selvaag Bolig ASA |
| Wilh Wilhelmsen Holding |
Selvaag Bolig and Wilh Wilhelmsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selvaag Bolig and Wilh Wilhelmsen
The main advantage of trading using opposite Selvaag Bolig and Wilh Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selvaag Bolig position performs unexpectedly, Wilh Wilhelmsen 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 Wilh Wilhelmsen will offset losses from the drop in Wilh Wilhelmsen's long position.The idea behind Selvaag Bolig ASA and Wilh Wilhelmsen Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Wilh Wilhelmsen vs. Stolt Nielsen Limited | Wilh Wilhelmsen vs. Wilh Wilhelmsen Holding | Wilh Wilhelmsen vs. Veidekke ASA | Wilh Wilhelmsen vs. Odfjell SE |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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