Correlation Between SeaBird Exploration and Instabank ASA
Can any of the company-specific risk be diversified away by investing in both SeaBird Exploration and Instabank 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 SeaBird Exploration and Instabank ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SeaBird Exploration Plc and Instabank ASA, you can compare the effects of market volatilities on SeaBird Exploration and Instabank 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 SeaBird Exploration with a short position of Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeaBird Exploration and Instabank ASA.
Diversification Opportunities for SeaBird Exploration and Instabank ASA
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SeaBird and Instabank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SeaBird Exploration Plc and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA and SeaBird Exploration 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 SeaBird Exploration Plc are associated (or correlated) with Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of SeaBird Exploration i.e., SeaBird Exploration and Instabank ASA go up and down completely randomly.
Pair Corralation between SeaBird Exploration and Instabank ASA
Assuming the 90 days trading horizon SeaBird Exploration Plc is expected to generate 1.07 times more return on investment than Instabank ASA. However, SeaBird Exploration is 1.07 times more volatile than Instabank ASA. It trades about 0.41 of its potential returns per unit of risk. Instabank ASA is currently generating about 0.01 per unit of risk. If you would invest 505.00 in SeaBird Exploration Plc on September 1, 2024 and sell it today you would earn a total of 71.00 from holding SeaBird Exploration Plc or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SeaBird Exploration Plc vs. Instabank ASA
Performance |
| Timeline |
| SeaBird Exploration Plc |
| Instabank ASA |
SeaBird Exploration and Instabank ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeaBird Exploration and Instabank ASA
The main advantage of trading using opposite SeaBird Exploration and Instabank ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeaBird Exploration position performs unexpectedly, Instabank 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 Instabank ASA will offset losses from the drop in Instabank ASA's long position.| SeaBird Exploration vs. Aker ASA | SeaBird Exploration vs. Subsea 7 SA | SeaBird Exploration vs. TGS NOPEC Geophysical | SeaBird Exploration vs. BW Offshore |
| Instabank ASA vs. Sparebank 1 SMN | Instabank ASA vs. Sparebank 1 Nord Norge | Instabank ASA vs. Sparebanken Vest | Instabank ASA vs. Sparebank 1 Ostfold |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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