Correlation Between Sparebanken Ost and Nordic Unmanned
Can any of the company-specific risk be diversified away by investing in both Sparebanken Ost and Nordic Unmanned 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 Sparebanken Ost and Nordic Unmanned into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Ost and Nordic Unmanned As, you can compare the effects of market volatilities on Sparebanken Ost and Nordic Unmanned 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 Sparebanken Ost with a short position of Nordic Unmanned. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Ost and Nordic Unmanned.
Diversification Opportunities for Sparebanken Ost and Nordic Unmanned
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebanken and Nordic is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Ost and Nordic Unmanned As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Unmanned As and Sparebanken Ost 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 Sparebanken Ost are associated (or correlated) with Nordic Unmanned. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Unmanned As has no effect on the direction of Sparebanken Ost i.e., Sparebanken Ost and Nordic Unmanned go up and down completely randomly.
Pair Corralation between Sparebanken Ost and Nordic Unmanned
Assuming the 90 days trading horizon Sparebanken Ost is expected to generate 0.07 times more return on investment than Nordic Unmanned. However, Sparebanken Ost is 14.46 times less risky than Nordic Unmanned. It trades about 0.21 of its potential returns per unit of risk. Nordic Unmanned As is currently generating about -0.17 per unit of risk. If you would invest 6,250 in Sparebanken Ost on August 29, 2024 and sell it today you would earn a total of 460.00 from holding Sparebanken Ost or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebanken Ost vs. Nordic Unmanned As
Performance |
| Timeline |
| Sparebanken Ost |
| Nordic Unmanned As |
Sparebanken Ost and Nordic Unmanned Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Ost and Nordic Unmanned
The main advantage of trading using opposite Sparebanken Ost and Nordic Unmanned positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Ost position performs unexpectedly, Nordic Unmanned 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 Nordic Unmanned will offset losses from the drop in Nordic Unmanned's long position.| Sparebanken Ost vs. Lea Bank ASA | Sparebanken Ost vs. Nordhealth AS | Sparebanken Ost vs. Romsdal Sparebank | Sparebanken Ost vs. Sea1 Offshore |
| Nordic Unmanned vs. Skue Sparebank | Nordic Unmanned vs. Sparebanken Ost | Nordic Unmanned vs. Napatech AS | Nordic Unmanned 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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