Correlation Between Shelf Drilling and Sparebanken Ost
Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and Sparebanken Ost 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 Sparebanken Ost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelf Drilling and Sparebanken Ost, you can compare the effects of market volatilities on Shelf Drilling and Sparebanken Ost 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 Sparebanken Ost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and Sparebanken Ost.
Diversification Opportunities for Shelf Drilling and Sparebanken Ost
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shelf and Sparebanken is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost 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 Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Sparebanken Ost go up and down completely randomly.
Pair Corralation between Shelf Drilling and Sparebanken Ost
Assuming the 90 days trading horizon Shelf Drilling is expected to under-perform the Sparebanken Ost. In addition to that, Shelf Drilling is 3.57 times more volatile than Sparebanken Ost. It trades about -0.26 of its total potential returns per unit of risk. Sparebanken Ost is currently generating about 0.13 per unit of volatility. If you would invest 5,999 in Sparebanken Ost on September 3, 2024 and sell it today you would earn a total of 511.00 from holding Sparebanken Ost or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelf Drilling vs. Sparebanken Ost
Performance |
| Timeline |
| Shelf Drilling |
| Sparebanken Ost |
Shelf Drilling and Sparebanken Ost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelf Drilling and Sparebanken Ost
The main advantage of trading using opposite Shelf Drilling and Sparebanken Ost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, Sparebanken Ost 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 Sparebanken Ost will offset losses from the drop in Sparebanken Ost'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 |
| Sparebanken Ost vs. Melhus Sparebank | Sparebanken Ost vs. Holand og Setskog | Sparebanken Ost vs. Helgeland Sparebank | Sparebanken Ost 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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