Correlation Between Sogn Sparebank and Deep Value
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and Deep Value 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 Deep Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and Deep Value Driller, you can compare the effects of market volatilities on Sogn Sparebank and Deep Value 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 Deep Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and Deep Value.
Diversification Opportunities for Sogn Sparebank and Deep Value
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sogn and Deep is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and Deep Value Driller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deep Value Driller 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 Deep Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deep Value Driller has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and Deep Value go up and down completely randomly.
Pair Corralation between Sogn Sparebank and Deep Value
Assuming the 90 days trading horizon Sogn Sparebank is expected to generate 1.14 times more return on investment than Deep Value. However, Sogn Sparebank is 1.14 times more volatile than Deep Value Driller. It trades about 0.33 of its potential returns per unit of risk. Deep Value Driller is currently generating about -0.34 per unit of risk. If you would invest 22,750 in Sogn Sparebank on September 1, 2024 and sell it today you would earn a total of 3,645 from holding Sogn Sparebank or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sogn Sparebank vs. Deep Value Driller
Performance |
| Timeline |
| Sogn Sparebank |
| Deep Value Driller |
Sogn Sparebank and Deep Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogn Sparebank and Deep Value
The main advantage of trading using opposite Sogn Sparebank and Deep Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, Deep Value 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 Deep Value will offset losses from the drop in Deep Value's long position.| Sogn Sparebank vs. Sparebanken Sor | Sogn Sparebank vs. SpareBank 1 stlandet | Sogn Sparebank vs. Holand og Setskog | Sogn Sparebank vs. Sparebank 1 Ringerike |
| Deep Value vs. Sogn Sparebank | Deep Value vs. Morrow Bank ASA | Deep Value vs. Lea Bank ASA | Deep Value vs. Cloudberry Clean Energy |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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