Correlation Between Sogn Sparebank and SoftOx Solutions
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and SoftOx Solutions 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 SoftOx Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and SoftOx Solutions AS, you can compare the effects of market volatilities on Sogn Sparebank and SoftOx Solutions 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 SoftOx Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and SoftOx Solutions.
Diversification Opportunities for Sogn Sparebank and SoftOx Solutions
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sogn and SoftOx is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and SoftOx Solutions AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftOx Solutions 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 SoftOx Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftOx Solutions has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and SoftOx Solutions go up and down completely randomly.
Pair Corralation between Sogn Sparebank and SoftOx Solutions
Assuming the 90 days trading horizon Sogn Sparebank is expected to generate 0.21 times more return on investment than SoftOx Solutions. However, Sogn Sparebank is 4.69 times less risky than SoftOx Solutions. It trades about 0.09 of its potential returns per unit of risk. SoftOx Solutions AS is currently generating about -0.1 per unit of risk. If you would invest 11,565 in Sogn Sparebank on September 2, 2024 and sell it today you would earn a total of 14,830 from holding Sogn Sparebank or generate 128.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sogn Sparebank vs. SoftOx Solutions AS
Performance |
| Timeline |
| Sogn Sparebank |
| SoftOx Solutions |
Sogn Sparebank and SoftOx Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogn Sparebank and SoftOx Solutions
The main advantage of trading using opposite Sogn Sparebank and SoftOx Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, SoftOx Solutions 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 SoftOx Solutions will offset losses from the drop in SoftOx Solutions' 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 |
| SoftOx Solutions vs. Sogn Sparebank | SoftOx Solutions vs. Bien Sparebank ASA | SoftOx Solutions vs. Norwegian Air Shuttle | SoftOx Solutions 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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