Correlation Between Sogn Sparebank and Exact Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and Exact Therapeutics 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 Exact Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and Exact Therapeutics AS, you can compare the effects of market volatilities on Sogn Sparebank and Exact Therapeutics 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 Exact Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and Exact Therapeutics.
Diversification Opportunities for Sogn Sparebank and Exact Therapeutics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sogn and Exact is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and Exact Therapeutics AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exact Therapeutics 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 Exact Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exact Therapeutics has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and Exact Therapeutics go up and down completely randomly.
Pair Corralation between Sogn Sparebank and Exact Therapeutics
Assuming the 90 days trading horizon Sogn Sparebank is expected to generate 0.82 times more return on investment than Exact Therapeutics. However, Sogn Sparebank is 1.22 times less risky than Exact Therapeutics. It trades about 0.32 of its potential returns per unit of risk. Exact Therapeutics AS is currently generating about -0.06 per unit of risk. If you would invest 24,800 in Sogn Sparebank on October 20, 2024 and sell it today you would earn a total of 4,900 from holding Sogn Sparebank or generate 19.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sogn Sparebank vs. Exact Therapeutics AS
Performance |
| Timeline |
| Sogn Sparebank |
| Exact Therapeutics |
Sogn Sparebank and Exact Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogn Sparebank and Exact Therapeutics
The main advantage of trading using opposite Sogn Sparebank and Exact Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, Exact Therapeutics 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 Exact Therapeutics will offset losses from the drop in Exact Therapeutics' 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 |
| Exact Therapeutics vs. Airthings ASA | Exact Therapeutics vs. Aega ASA | Exact Therapeutics vs. Huddly AS | Exact Therapeutics vs. Bergenbio 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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