Correlation Between Sogn Sparebank and Tekna Holding
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and Tekna Holding 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 Tekna Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and Tekna Holding AS, you can compare the effects of market volatilities on Sogn Sparebank and Tekna Holding 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 Tekna Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and Tekna Holding.
Diversification Opportunities for Sogn Sparebank and Tekna Holding
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sogn and Tekna is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and Tekna Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekna Holding 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 Tekna Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekna Holding AS has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and Tekna Holding go up and down completely randomly.
Pair Corralation between Sogn Sparebank and Tekna Holding
Assuming the 90 days trading horizon Sogn Sparebank is expected to generate 0.59 times more return on investment than Tekna Holding. However, Sogn Sparebank is 1.68 times less risky than Tekna Holding. It trades about 0.08 of its potential returns per unit of risk. Tekna Holding AS is currently generating about -0.02 per unit of risk. If you would invest 12,342 in Sogn Sparebank on September 1, 2024 and sell it today you would earn a total of 14,053 from holding Sogn Sparebank or generate 113.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Sogn Sparebank vs. Tekna Holding AS
Performance |
| Timeline |
| Sogn Sparebank |
| Tekna Holding AS |
Sogn Sparebank and Tekna Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogn Sparebank and Tekna Holding
The main advantage of trading using opposite Sogn Sparebank and Tekna Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, Tekna Holding 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 Tekna Holding will offset losses from the drop in Tekna Holding'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 |
| Tekna Holding vs. Romsdal Sparebank | Tekna Holding vs. BW Offshore | Tekna Holding vs. Nidaros Sparebank | Tekna Holding vs. Sogn Sparebank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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