Correlation Between Skue Sparebank and Beerenberg
Can any of the company-specific risk be diversified away by investing in both Skue Sparebank and Beerenberg 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 Skue Sparebank and Beerenberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skue Sparebank and Beerenberg AS, you can compare the effects of market volatilities on Skue Sparebank and Beerenberg 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 Skue Sparebank with a short position of Beerenberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skue Sparebank and Beerenberg.
Diversification Opportunities for Skue Sparebank and Beerenberg
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Skue and Beerenberg is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Skue Sparebank and Beerenberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beerenberg AS and Skue Sparebank 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 Skue Sparebank are associated (or correlated) with Beerenberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beerenberg AS has no effect on the direction of Skue Sparebank i.e., Skue Sparebank and Beerenberg go up and down completely randomly.
Pair Corralation between Skue Sparebank and Beerenberg
Assuming the 90 days trading horizon Skue Sparebank is expected to generate 4.21 times less return on investment than Beerenberg. But when comparing it to its historical volatility, Skue Sparebank is 1.87 times less risky than Beerenberg. It trades about 0.06 of its potential returns per unit of risk. Beerenberg AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,800 in Beerenberg AS on September 1, 2024 and sell it today you would earn a total of 1,300 from holding Beerenberg AS or generate 46.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skue Sparebank vs. Beerenberg AS
Performance |
| Timeline |
| Skue Sparebank |
| Beerenberg AS |
Skue Sparebank and Beerenberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skue Sparebank and Beerenberg
The main advantage of trading using opposite Skue Sparebank and Beerenberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skue Sparebank position performs unexpectedly, Beerenberg 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 Beerenberg will offset losses from the drop in Beerenberg's long position.| Skue Sparebank vs. Melhus Sparebank | Skue Sparebank vs. Sparebanken Ost | Skue Sparebank vs. Sparebanken Sor |
| Beerenberg vs. Sparebanken Ost | Beerenberg vs. Skue Sparebank | Beerenberg vs. Polaris Media | Beerenberg vs. Clean Seas Seafood |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |