Correlation Between SpareBank and HAV Group
Can any of the company-specific risk be diversified away by investing in both SpareBank and HAV Group 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 SpareBank and HAV Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SpareBank 1 stlandet and HAV Group ASA, you can compare the effects of market volatilities on SpareBank and HAV Group 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 SpareBank with a short position of HAV Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpareBank and HAV Group.
Diversification Opportunities for SpareBank and HAV Group
Very good diversification
The 3 months correlation between SpareBank and HAV is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SpareBank 1 stlandet and HAV Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAV Group ASA and 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 SpareBank 1 stlandet are associated (or correlated) with HAV Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAV Group ASA has no effect on the direction of SpareBank i.e., SpareBank and HAV Group go up and down completely randomly.
Pair Corralation between SpareBank and HAV Group
Assuming the 90 days trading horizon SpareBank 1 stlandet is expected to generate 0.45 times more return on investment than HAV Group. However, SpareBank 1 stlandet is 2.24 times less risky than HAV Group. It trades about -0.07 of its potential returns per unit of risk. HAV Group ASA is currently generating about -0.23 per unit of risk. If you would invest 15,366 in SpareBank 1 stlandet on August 29, 2024 and sell it today you would lose (440.00) from holding SpareBank 1 stlandet or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SpareBank 1 stlandet vs. HAV Group ASA
Performance |
| Timeline |
| SpareBank 1 stlandet |
| HAV Group ASA |
SpareBank and HAV Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SpareBank and HAV Group
The main advantage of trading using opposite SpareBank and HAV Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpareBank position performs unexpectedly, HAV Group 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 HAV Group will offset losses from the drop in HAV Group's long position.| SpareBank vs. Sparebanken Vest | SpareBank vs. Sparebank 1 Nord Norge | SpareBank vs. Sparebank 1 SMN | SpareBank vs. Sparebanken Ost |
| HAV Group vs. Napatech AS | HAV Group vs. Sparebanken Ost | HAV Group vs. Beerenberg AS | HAV Group vs. Arcticzymes Technologies ASA |
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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