Correlation Between Sea1 Offshore and Instabank ASA
Can any of the company-specific risk be diversified away by investing in both Sea1 Offshore 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 Sea1 Offshore and Instabank ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea1 Offshore and Instabank ASA, you can compare the effects of market volatilities on Sea1 Offshore 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 Sea1 Offshore with a short position of Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea1 Offshore and Instabank ASA.
Diversification Opportunities for Sea1 Offshore and Instabank ASA
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sea1 and Instabank is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sea1 Offshore and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA 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 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 Sea1 Offshore i.e., Sea1 Offshore and Instabank ASA go up and down completely randomly.
Pair Corralation between Sea1 Offshore and Instabank ASA
Assuming the 90 days trading horizon Sea1 Offshore is expected to generate 2.29 times more return on investment than Instabank ASA. However, Sea1 Offshore is 2.29 times more volatile than Instabank ASA. It trades about 0.16 of its potential returns per unit of risk. Instabank ASA is currently generating about 0.03 per unit of risk. If you would invest 2,665 in Sea1 Offshore on September 3, 2024 and sell it today you would earn a total of 220.00 from holding Sea1 Offshore or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea1 Offshore vs. Instabank ASA
Performance |
| Timeline |
| Sea1 Offshore |
| Instabank ASA |
Sea1 Offshore and Instabank ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea1 Offshore and Instabank ASA
The main advantage of trading using opposite Sea1 Offshore and Instabank ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea1 Offshore 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.| Sea1 Offshore vs. Equinor ASA | Sea1 Offshore vs. DnB ASA | Sea1 Offshore vs. Aker BP ASA | Sea1 Offshore vs. Telenor ASA |
| Instabank ASA vs. SD Standard Drilling | Instabank ASA vs. Gaming Innovation Group | Instabank ASA vs. Eidesvik Offshore ASA | Instabank ASA vs. Norwegian Air Shuttle |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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