Correlation Between Shelf Drilling and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and Jaeren 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 Shelf Drilling and Jaeren Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelf Drilling and Jaeren Sparebank, you can compare the effects of market volatilities on Shelf Drilling and Jaeren 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 Shelf Drilling with a short position of Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and Jaeren Sparebank.
Diversification Opportunities for Shelf Drilling and Jaeren Sparebank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shelf and Jaeren is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank and Shelf Drilling 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 Shelf Drilling are associated (or correlated) with Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between Shelf Drilling and Jaeren Sparebank
Assuming the 90 days trading horizon Shelf Drilling is expected to under-perform the Jaeren Sparebank. In addition to that, Shelf Drilling is 12.82 times more volatile than Jaeren Sparebank. It trades about -0.22 of its total potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.05 per unit of volatility. If you would invest 31,695 in Jaeren Sparebank on September 3, 2024 and sell it today you would earn a total of 195.00 from holding Jaeren Sparebank or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelf Drilling vs. Jaeren Sparebank
Performance |
| Timeline |
| Shelf Drilling |
| Jaeren Sparebank |
Shelf Drilling and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelf Drilling and Jaeren Sparebank
The main advantage of trading using opposite Shelf Drilling and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, Jaeren 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank's long position.| Shelf Drilling vs. BW Offshore | Shelf Drilling vs. Subsea 7 SA | Shelf Drilling vs. Elkem ASA | Shelf Drilling vs. Integrated Wind Solutions |
| Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Skue Sparebank | Jaeren Sparebank vs. Instabank ASA | Jaeren Sparebank vs. Waste Plastic Upcycling |
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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