Correlation Between Sogn Sparebank and Green Minerals
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and Green Minerals 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 Green Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and Green Minerals AS, you can compare the effects of market volatilities on Sogn Sparebank and Green Minerals 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 Green Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and Green Minerals.
Diversification Opportunities for Sogn Sparebank and Green Minerals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sogn and Green is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and Green Minerals AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Minerals AS 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 Green Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Minerals AS has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and Green Minerals go up and down completely randomly.
Pair Corralation between Sogn Sparebank and Green Minerals
Assuming the 90 days trading horizon Sogn Sparebank is expected to generate 1.24 times more return on investment than Green Minerals. However, Sogn Sparebank is 1.24 times more volatile than Green Minerals AS. It trades about 0.2 of its potential returns per unit of risk. Green Minerals AS is currently generating about 0.09 per unit of risk. If you would invest 24,795 in Sogn Sparebank on November 3, 2024 and sell it today you would earn a total of 4,305 from holding Sogn Sparebank or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sogn Sparebank vs. Green Minerals AS
Performance |
| Timeline |
| Sogn Sparebank |
| Green Minerals AS |
Sogn Sparebank and Green Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogn Sparebank and Green Minerals
The main advantage of trading using opposite Sogn Sparebank and Green Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, Green Minerals 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 Green Minerals will offset losses from the drop in Green Minerals' 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 |
| Green Minerals vs. SpareBank 1 stlandet | Green Minerals vs. Kraft Bank Asa | Green Minerals vs. Bien Sparebank ASA | Green Minerals vs. Nordic Mining 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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