Correlation Between Stolt Nielsen and Instabank ASA
Can any of the company-specific risk be diversified away by investing in both Stolt Nielsen and Instabank ASA 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 Stolt Nielsen and Instabank ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stolt Nielsen Limited and Instabank ASA, you can compare the effects of market volatilities on Stolt Nielsen and Instabank ASA 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 Stolt Nielsen with a short position of Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stolt Nielsen and Instabank ASA.
Diversification Opportunities for Stolt Nielsen and Instabank ASA
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stolt and Instabank is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA and Stolt Nielsen 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 Stolt Nielsen Limited are associated (or correlated) with Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of Stolt Nielsen i.e., Stolt Nielsen and Instabank ASA go up and down completely randomly.
Pair Corralation between Stolt Nielsen and Instabank ASA
Assuming the 90 days trading horizon Stolt Nielsen Limited is expected to under-perform the Instabank ASA. In addition to that, Stolt Nielsen is 1.22 times more volatile than Instabank ASA. It trades about -0.23 of its total potential returns per unit of risk. Instabank ASA is currently generating about -0.01 per unit of volatility. If you would invest 193.00 in Instabank ASA on August 30, 2024 and sell it today you would lose (1.00) from holding Instabank ASA or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stolt Nielsen Limited vs. Instabank ASA
Performance |
| Timeline |
| Stolt Nielsen Limited |
| Instabank ASA |
Stolt Nielsen and Instabank ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stolt Nielsen and Instabank ASA
The main advantage of trading using opposite Stolt Nielsen and Instabank ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen position performs unexpectedly, Instabank ASA 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 Instabank ASA will offset losses from the drop in Instabank ASA's long position.| Stolt Nielsen vs. Byggma | Stolt Nielsen vs. Gigante Salmon AS | Stolt Nielsen vs. Elkem ASA | Stolt Nielsen vs. DNB NOR KAPFORV |
| Instabank ASA vs. Skue Sparebank | Instabank ASA vs. Sunndal Sparebank | Instabank ASA vs. Dolphin Drilling AS | Instabank ASA vs. Romerike Sparebank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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