Correlation Between Strix Group and SpareBank
Can any of the company-specific risk be diversified away by investing in both Strix Group and 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 Strix Group and SpareBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strix Group Plc and SpareBank 1 SR Bank, you can compare the effects of market volatilities on Strix Group and 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 Strix Group with a short position of SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strix Group and SpareBank.
Diversification Opportunities for Strix Group and SpareBank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Strix and SpareBank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Strix Group Plc and SpareBank 1 SR Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 SR and Strix Group 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 Strix Group Plc are associated (or correlated) with SpareBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpareBank 1 SR has no effect on the direction of Strix Group i.e., Strix Group and SpareBank go up and down completely randomly.
Pair Corralation between Strix Group and SpareBank
Assuming the 90 days horizon Strix Group Plc is expected to under-perform the SpareBank. But the stock apears to be less risky and, when comparing its historical volatility, Strix Group Plc is 2.93 times less risky than SpareBank. The stock trades about -0.03 of its potential returns per unit of risk. The SpareBank 1 SR Bank is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,028 in SpareBank 1 SR Bank on August 31, 2024 and sell it today you would earn a total of 186.00 from holding SpareBank 1 SR Bank or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strix Group Plc vs. SpareBank 1 SR Bank
Performance |
| Timeline |
| Strix Group Plc |
| SpareBank 1 SR |
Strix Group and SpareBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strix Group and SpareBank
The main advantage of trading using opposite Strix Group and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strix Group position performs unexpectedly, 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 SpareBank will offset losses from the drop in SpareBank's long position.| Strix Group vs. Murata Manufacturing Co | Strix Group vs. Corning Incorporated | Strix Group vs. TDK Corporation |
| SpareBank vs. HEALTHCARE REAL A | SpareBank vs. ETFS Coffee ETC | SpareBank vs. EPSILON HEALTHCARE LTD | SpareBank vs. Bausch Health Companies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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