Correlation Between SpareBank and Lery Seafood
Can any of the company-specific risk be diversified away by investing in both SpareBank and Lery Seafood 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 Lery Seafood 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 Lery Seafood Group, you can compare the effects of market volatilities on SpareBank and Lery Seafood 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 Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpareBank and Lery Seafood.
Diversification Opportunities for SpareBank and Lery Seafood
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SpareBank and Lery is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SpareBank 1 stlandet and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of SpareBank i.e., SpareBank and Lery Seafood go up and down completely randomly.
Pair Corralation between SpareBank and Lery Seafood
Assuming the 90 days trading horizon SpareBank is expected to generate 1.03 times less return on investment than Lery Seafood. But when comparing it to its historical volatility, SpareBank 1 stlandet is 1.4 times less risky than Lery Seafood. It trades about 0.07 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,147 in Lery Seafood Group on September 1, 2024 and sell it today you would earn a total of 1,003 from holding Lery Seafood Group or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SpareBank 1 stlandet vs. Lery Seafood Group
Performance |
| Timeline |
| SpareBank 1 stlandet |
| Lery Seafood Group |
SpareBank and Lery Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SpareBank and Lery Seafood
The main advantage of trading using opposite SpareBank and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpareBank position performs unexpectedly, Lery Seafood 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.| SpareBank vs. Sparebank 1 SMN | SpareBank vs. Sparebank 1 Nord Norge | SpareBank vs. Sparebanken Vest | SpareBank vs. Sparebank 1 SR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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