Correlation Between Sogn Sparebank and Baltic Sea
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and Baltic Sea 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 Sogn Sparebank and Baltic Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and Baltic Sea Properties, you can compare the effects of market volatilities on Sogn Sparebank and Baltic Sea 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 Sogn Sparebank with a short position of Baltic Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and Baltic Sea.
Diversification Opportunities for Sogn Sparebank and Baltic Sea
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sogn and Baltic is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and Baltic Sea Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baltic Sea Properties and Sogn 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 Sogn Sparebank are associated (or correlated) with Baltic Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baltic Sea Properties has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and Baltic Sea go up and down completely randomly.
Pair Corralation between Sogn Sparebank and Baltic Sea
Assuming the 90 days trading horizon Sogn Sparebank is expected to generate 1.72 times more return on investment than Baltic Sea. However, Sogn Sparebank is 1.72 times more volatile than Baltic Sea Properties. It trades about 0.08 of its potential returns per unit of risk. Baltic Sea Properties is currently generating about 0.02 per unit of risk. If you would invest 11,652 in Sogn Sparebank on September 12, 2024 and sell it today you would earn a total of 13,343 from holding Sogn Sparebank or generate 114.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sogn Sparebank vs. Baltic Sea Properties
Performance |
Timeline |
Sogn Sparebank |
Baltic Sea Properties |
Sogn Sparebank and Baltic Sea Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sogn Sparebank and Baltic Sea
The main advantage of trading using opposite Sogn Sparebank and Baltic Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, Baltic Sea 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 Baltic Sea will offset losses from the drop in Baltic Sea's long position.Sogn Sparebank vs. Sparebanken Sor | Sogn Sparebank vs. SpareBank 1 stlandet | Sogn Sparebank vs. Kongsberg Gruppen ASA | Sogn Sparebank vs. Napatech AS |
Baltic Sea vs. Entra ASA | Baltic Sea vs. Selvaag Bolig ASA | Baltic Sea vs. Kmc Properties ASA | Baltic Sea vs. RomReal Limited |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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