Correlation Between Skue Sparebank and Hermana Holding
Can any of the company-specific risk be diversified away by investing in both Skue Sparebank and Hermana Holding 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 Hermana Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skue Sparebank and Hermana Holding ASA, you can compare the effects of market volatilities on Skue Sparebank and Hermana Holding 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 Hermana Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skue Sparebank and Hermana Holding.
Diversification Opportunities for Skue Sparebank and Hermana Holding
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Skue and Hermana is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Skue Sparebank and Hermana Holding ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hermana Holding ASA 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 Hermana Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hermana Holding ASA has no effect on the direction of Skue Sparebank i.e., Skue Sparebank and Hermana Holding go up and down completely randomly.
Pair Corralation between Skue Sparebank and Hermana Holding
Assuming the 90 days trading horizon Skue Sparebank is expected to generate 1.45 times less return on investment than Hermana Holding. But when comparing it to its historical volatility, Skue Sparebank is 1.92 times less risky than Hermana Holding. It trades about 0.18 of its potential returns per unit of risk. Hermana Holding ASA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,118 in Hermana Holding ASA on October 20, 2024 and sell it today you would earn a total of 56.00 from holding Hermana Holding ASA or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skue Sparebank vs. Hermana Holding ASA
Performance |
| Timeline |
| Skue Sparebank |
| Hermana Holding ASA |
Skue Sparebank and Hermana Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skue Sparebank and Hermana Holding
The main advantage of trading using opposite Skue Sparebank and Hermana Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skue Sparebank position performs unexpectedly, Hermana Holding 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 Hermana Holding will offset losses from the drop in Hermana Holding's long position.| Skue Sparebank vs. Melhus Sparebank | Skue Sparebank vs. Sparebanken Ost | Skue Sparebank vs. Sparebanken Sor |
| Hermana Holding vs. Equinor ASA | Hermana Holding vs. DnB ASA | Hermana Holding vs. Aker BP ASA | Hermana Holding vs. Telenor 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 CEOs Directory module to screen CEOs from public companies around the world.
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