Correlation Between Sea1 Offshore and Helgeland Sparebank
Can any of the company-specific risk be diversified away by investing in both Sea1 Offshore and Helgeland Sparebank 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 Sea1 Offshore and Helgeland Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea1 Offshore and Helgeland Sparebank, you can compare the effects of market volatilities on Sea1 Offshore and Helgeland Sparebank 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 Sea1 Offshore with a short position of Helgeland Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea1 Offshore and Helgeland Sparebank.
Diversification Opportunities for Sea1 Offshore and Helgeland Sparebank
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sea1 and Helgeland is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sea1 Offshore and Helgeland Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helgeland Sparebank and Sea1 Offshore 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 Sea1 Offshore are associated (or correlated) with Helgeland Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helgeland Sparebank has no effect on the direction of Sea1 Offshore i.e., Sea1 Offshore and Helgeland Sparebank go up and down completely randomly.
Pair Corralation between Sea1 Offshore and Helgeland Sparebank
Assuming the 90 days trading horizon Sea1 Offshore is expected to generate 1.48 times less return on investment than Helgeland Sparebank. In addition to that, Sea1 Offshore is 1.26 times more volatile than Helgeland Sparebank. It trades about 0.07 of its total potential returns per unit of risk. Helgeland Sparebank is currently generating about 0.14 per unit of volatility. If you would invest 15,480 in Helgeland Sparebank on November 27, 2024 and sell it today you would earn a total of 920.00 from holding Helgeland Sparebank or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea1 Offshore vs. Helgeland Sparebank
Performance |
| Timeline |
| Sea1 Offshore |
| Helgeland Sparebank |
Sea1 Offshore and Helgeland Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea1 Offshore and Helgeland Sparebank
The main advantage of trading using opposite Sea1 Offshore and Helgeland Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea1 Offshore position performs unexpectedly, Helgeland Sparebank 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 Helgeland Sparebank will offset losses from the drop in Helgeland Sparebank's long position.| Sea1 Offshore vs. Equinor ASA | Sea1 Offshore vs. DnB ASA | Sea1 Offshore vs. Aker BP ASA | Sea1 Offshore vs. Telenor ASA |
| Helgeland Sparebank vs. Sparebank 1 Nord Norge | Helgeland Sparebank vs. Sparebank 1 SMN | Helgeland Sparebank vs. Sparebanken Vest | Helgeland Sparebank vs. Sparebanken Mre |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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