Correlation Between Sogn Sparebank and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and Jaeren Sparebank 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 Jaeren Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and Jaeren Sparebank, you can compare the effects of market volatilities on Sogn Sparebank and Jaeren Sparebank 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 Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and Jaeren Sparebank.
Diversification Opportunities for Sogn Sparebank and Jaeren Sparebank
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sogn and Jaeren is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank 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 Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between Sogn Sparebank and Jaeren Sparebank
Assuming the 90 days trading horizon Sogn Sparebank is expected to under-perform the Jaeren Sparebank. In addition to that, Sogn Sparebank is 1.5 times more volatile than Jaeren Sparebank. It trades about -0.35 of its total potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.12 per unit of volatility. If you would invest 34,800 in Jaeren Sparebank on December 1, 2024 and sell it today you would earn a total of 1,200 from holding Jaeren Sparebank or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sogn Sparebank vs. Jaeren Sparebank
Performance |
| Timeline |
| Sogn Sparebank |
| Jaeren Sparebank |
Sogn Sparebank and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogn Sparebank and Jaeren Sparebank
The main advantage of trading using opposite Sogn Sparebank and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, Jaeren Sparebank 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank'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 |
| Jaeren Sparebank vs. Kraft Bank Asa | Jaeren Sparebank vs. Helgeland Sparebank | Jaeren Sparebank vs. Polaris Media | Jaeren Sparebank vs. Norwegian Air Shuttle |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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