Correlation Between Schibsted ASA and Western Bulk
Can any of the company-specific risk be diversified away by investing in both Schibsted ASA and Western Bulk 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 Schibsted ASA and Western Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schibsted ASA A and Western Bulk Chartering, you can compare the effects of market volatilities on Schibsted ASA and Western Bulk 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 Schibsted ASA with a short position of Western Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schibsted ASA and Western Bulk.
Diversification Opportunities for Schibsted ASA and Western Bulk
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Schibsted and Western is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Schibsted ASA A and Western Bulk Chartering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Bulk Chartering and Schibsted ASA 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 Schibsted ASA A are associated (or correlated) with Western Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Bulk Chartering has no effect on the direction of Schibsted ASA i.e., Schibsted ASA and Western Bulk go up and down completely randomly.
Pair Corralation between Schibsted ASA and Western Bulk
Assuming the 90 days trading horizon Schibsted ASA A is expected to generate 0.81 times more return on investment than Western Bulk. However, Schibsted ASA A is 1.24 times less risky than Western Bulk. It trades about 0.09 of its potential returns per unit of risk. Western Bulk Chartering is currently generating about -0.06 per unit of risk. If you would invest 17,230 in Schibsted ASA A on August 27, 2024 and sell it today you would earn a total of 19,610 from holding Schibsted ASA A or generate 113.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schibsted ASA A vs. Western Bulk Chartering
Performance |
| Timeline |
| Schibsted ASA A |
| Western Bulk Chartering |
Schibsted ASA and Western Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schibsted ASA and Western Bulk
The main advantage of trading using opposite Schibsted ASA and Western Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schibsted ASA position performs unexpectedly, Western Bulk 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 Western Bulk will offset losses from the drop in Western Bulk's long position.| Schibsted ASA vs. Storebrand ASA | Schibsted ASA vs. Gjensidige Forsikring ASA | Schibsted ASA vs. Schibsted ASA B | Schibsted ASA vs. DnB ASA |
| Western Bulk vs. Shelf Drilling | Western Bulk vs. Solstad Offsho | Western Bulk vs. Eidesvik Offshore ASA | Western Bulk vs. Elkem 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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