Correlation Between Sparebank and Holand Og
Can any of the company-specific risk be diversified away by investing in both Sparebank and Holand Og 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 Sparebank and Holand Og into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 Ostfold and Holand og Setskog, you can compare the effects of market volatilities on Sparebank and Holand Og 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 Sparebank with a short position of Holand Og. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Holand Og.
Diversification Opportunities for Sparebank and Holand Og
Poor diversification
The 3 months correlation between Sparebank and Holand is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 Ostfold and Holand og Setskog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holand og Setskog and 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 Sparebank 1 Ostfold are associated (or correlated) with Holand Og. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holand og Setskog has no effect on the direction of Sparebank i.e., Sparebank and Holand Og go up and down completely randomly.
Pair Corralation between Sparebank and Holand Og
Assuming the 90 days trading horizon Sparebank 1 Ostfold is expected to generate 0.67 times more return on investment than Holand Og. However, Sparebank 1 Ostfold is 1.5 times less risky than Holand Og. It trades about 0.06 of its potential returns per unit of risk. Holand og Setskog is currently generating about 0.02 per unit of risk. If you would invest 28,691 in Sparebank 1 Ostfold on September 12, 2024 and sell it today you would earn a total of 9,009 from holding Sparebank 1 Ostfold or generate 31.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 Ostfold vs. Holand og Setskog
Performance |
| Timeline |
| Sparebank 1 Ostfold |
| Holand og Setskog |
Sparebank and Holand Og Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Holand Og
The main advantage of trading using opposite Sparebank and Holand Og positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Holand Og 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 Holand Og will offset losses from the drop in Holand Og's long position.| Sparebank vs. Aurskog Sparebank | Sparebank vs. Helgeland Sparebank | Sparebank vs. Kongsberg Gruppen ASA | Sparebank vs. Napatech AS |
| Holand Og vs. Aurskog Sparebank | Holand Og vs. Helgeland Sparebank | Holand Og vs. Kongsberg Gruppen ASA | Holand Og vs. Napatech AS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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