Correlation Between Sparebanken Ost and Shelf Drilling
Can any of the company-specific risk be diversified away by investing in both Sparebanken Ost and Shelf Drilling 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 Shelf Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Ost and Shelf Drilling, you can compare the effects of market volatilities on Sparebanken Ost and Shelf Drilling 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 Shelf Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Ost and Shelf Drilling.
Diversification Opportunities for Sparebanken Ost and Shelf Drilling
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebanken and Shelf is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Ost and Shelf Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelf Drilling 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 Shelf Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelf Drilling has no effect on the direction of Sparebanken Ost i.e., Sparebanken Ost and Shelf Drilling go up and down completely randomly.
Pair Corralation between Sparebanken Ost and Shelf Drilling
Assuming the 90 days trading horizon Sparebanken Ost is expected to generate 0.23 times more return on investment than Shelf Drilling. However, Sparebanken Ost is 4.29 times less risky than Shelf Drilling. It trades about 0.06 of its potential returns per unit of risk. Shelf Drilling is currently generating about -0.21 per unit of risk. If you would invest 6,380 in Sparebanken Ost on September 1, 2024 and sell it today you would earn a total of 130.00 from holding Sparebanken Ost or generate 2.04% 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. Shelf Drilling
Performance |
| Timeline |
| Sparebanken Ost |
| Shelf Drilling |
Sparebanken Ost and Shelf Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Ost and Shelf Drilling
The main advantage of trading using opposite Sparebanken Ost and Shelf Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Ost position performs unexpectedly, Shelf Drilling 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 Shelf Drilling will offset losses from the drop in Shelf Drilling's long position.| Sparebanken Ost vs. Shelf Drilling | Sparebanken Ost vs. Odfjell Drilling | Sparebanken Ost vs. Nordic Semiconductor ASA | Sparebanken Ost vs. Lery Seafood Group |
| Shelf Drilling vs. Odfjell Drilling | Shelf Drilling vs. Borr Drilling | Shelf Drilling vs. Solstad Offsho | Shelf Drilling vs. Kongsberg Automotive Holding |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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