Correlation Between SpareBank and Hynion AS
Can any of the company-specific risk be diversified away by investing in both SpareBank and Hynion AS 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 Hynion AS 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 Hynion AS, you can compare the effects of market volatilities on SpareBank and Hynion AS 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 Hynion AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpareBank and Hynion AS.
Diversification Opportunities for SpareBank and Hynion AS
Excellent diversification
The 3 months correlation between SpareBank and Hynion is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SpareBank 1 stlandet and Hynion AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hynion AS 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 Hynion AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hynion AS has no effect on the direction of SpareBank i.e., SpareBank and Hynion AS go up and down completely randomly.
Pair Corralation between SpareBank and Hynion AS
Assuming the 90 days trading horizon SpareBank 1 stlandet is expected to generate 0.05 times more return on investment than Hynion AS. However, SpareBank 1 stlandet is 18.35 times less risky than Hynion AS. It trades about 0.37 of its potential returns per unit of risk. Hynion AS is currently generating about 0.01 per unit of risk. If you would invest 14,900 in SpareBank 1 stlandet on October 11, 2024 and sell it today you would earn a total of 930.00 from holding SpareBank 1 stlandet or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SpareBank 1 stlandet vs. Hynion AS
Performance |
| Timeline |
| SpareBank 1 stlandet |
| Hynion AS |
SpareBank and Hynion AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SpareBank and Hynion AS
The main advantage of trading using opposite SpareBank and Hynion AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpareBank position performs unexpectedly, Hynion AS 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 Hynion AS will offset losses from the drop in Hynion AS's long position.| SpareBank vs. Sparebank 1 SMN | SpareBank vs. Sparebank 1 Nord Norge | SpareBank vs. Sparebanken Vest | SpareBank vs. Pareto Bank ASA |
| Hynion AS vs. Sea1 Offshore | Hynion AS vs. Goodtech | Hynion AS vs. Bien Sparebank ASA | Hynion AS vs. SpareBank 1 stlandet |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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