Correlation Between Selvaag Bolig and Wilh Wilhelmsen

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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

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Selvaag and Wilh is 0.51. 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 generate 0.96 times more return on investment than Wilh Wilhelmsen. However, Selvaag Bolig ASA is 1.04 times less risky than Wilh Wilhelmsen. It trades about 0.07 of its potential returns per unit of risk. Wilh Wilhelmsen Holding is currently generating about 0.05 per unit of risk. If you would invest  3,295  in Selvaag Bolig ASA on September 1, 2024 and sell it today you would earn a total of  85.00  from holding Selvaag Bolig ASA or generate 2.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Selvaag Bolig ASA  vs.  Wilh Wilhelmsen Holding

 Performance 
       Timeline  
Selvaag Bolig ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Selvaag Bolig ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Selvaag Bolig is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Wilh Wilhelmsen Holding 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Wilh Wilhelmsen Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Wilh Wilhelmsen is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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