Correlation Between Shelf Drilling and Sunndal Sparebank
Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and Sunndal 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 Sunndal 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 Sunndal Sparebank, you can compare the effects of market volatilities on Shelf Drilling and Sunndal 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 Sunndal Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and Sunndal Sparebank.
Diversification Opportunities for Shelf Drilling and Sunndal Sparebank
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shelf and Sunndal is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Sunndal Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunndal 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 Sunndal Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunndal Sparebank has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Sunndal Sparebank go up and down completely randomly.
Pair Corralation between Shelf Drilling and Sunndal Sparebank
Assuming the 90 days trading horizon Shelf Drilling is expected to under-perform the Sunndal Sparebank. In addition to that, Shelf Drilling is 8.14 times more volatile than Sunndal Sparebank. It trades about -0.22 of its total potential returns per unit of risk. Sunndal Sparebank is currently generating about -0.13 per unit of volatility. If you would invest 11,910 in Sunndal Sparebank on September 3, 2024 and sell it today you would lose (300.00) from holding Sunndal Sparebank or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelf Drilling vs. Sunndal Sparebank
Performance |
| Timeline |
| Shelf Drilling |
| Sunndal Sparebank |
Shelf Drilling and Sunndal Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelf Drilling and Sunndal Sparebank
The main advantage of trading using opposite Shelf Drilling and Sunndal Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, Sunndal 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 Sunndal Sparebank will offset losses from the drop in Sunndal 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 |
| Sunndal Sparebank vs. DnB ASA | Sunndal Sparebank vs. Sparebank 1 SR | Sunndal Sparebank vs. Sparebank 1 SMN | Sunndal 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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