Correlation Between SpareBank and Waste Plastic
Can any of the company-specific risk be diversified away by investing in both SpareBank and Waste Plastic 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 Waste Plastic 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 Waste Plastic Upcycling, you can compare the effects of market volatilities on SpareBank and Waste Plastic 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 Waste Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpareBank and Waste Plastic.
Diversification Opportunities for SpareBank and Waste Plastic
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SpareBank and Waste is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SpareBank 1 stlandet and Waste Plastic Upcycling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Plastic Upcycling 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 Waste Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Plastic Upcycling has no effect on the direction of SpareBank i.e., SpareBank and Waste Plastic go up and down completely randomly.
Pair Corralation between SpareBank and Waste Plastic
Assuming the 90 days trading horizon SpareBank 1 stlandet is expected to generate 0.42 times more return on investment than Waste Plastic. However, SpareBank 1 stlandet is 2.36 times less risky than Waste Plastic. It trades about 0.0 of its potential returns per unit of risk. Waste Plastic Upcycling is currently generating about -0.47 per unit of risk. If you would invest 14,998 in SpareBank 1 stlandet on September 4, 2024 and sell it today you would lose (16.00) from holding SpareBank 1 stlandet or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SpareBank 1 stlandet vs. Waste Plastic Upcycling
Performance |
| Timeline |
| SpareBank 1 stlandet |
| Waste Plastic Upcycling |
SpareBank and Waste Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SpareBank and Waste Plastic
The main advantage of trading using opposite SpareBank and Waste Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpareBank position performs unexpectedly, Waste Plastic 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 Waste Plastic will offset losses from the drop in Waste Plastic's long position.| SpareBank vs. Sparebank 1 SMN | SpareBank vs. Sparebank 1 Nord Norge | SpareBank vs. Sparebanken Vest | SpareBank vs. Pareto Bank ASA |
| Waste Plastic vs. Tomra Systems ASA | Waste Plastic vs. Agilyx AS | Waste Plastic vs. Cambi ASA | Waste Plastic vs. Vow Green Metals |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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