Correlation Between Sparebank and Aega ASA
Can any of the company-specific risk be diversified away by investing in both Sparebank and Aega ASA 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 Aega ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Aega ASA, you can compare the effects of market volatilities on Sparebank and Aega ASA 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 Aega ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Aega ASA.
Diversification Opportunities for Sparebank and Aega ASA
Very good diversification
The 3 months correlation between Sparebank and Aega is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Aega ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aega 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 SR are associated (or correlated) with Aega ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aega ASA has no effect on the direction of Sparebank i.e., Sparebank and Aega ASA go up and down completely randomly.
Pair Corralation between Sparebank and Aega ASA
Assuming the 90 days trading horizon Sparebank is expected to generate 4.73 times less return on investment than Aega ASA. But when comparing it to its historical volatility, Sparebank 1 SR is 15.91 times less risky than Aega ASA. It trades about 0.08 of its potential returns per unit of risk. Aega ASA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 260.00 in Aega ASA on September 4, 2024 and sell it today you would lose (223.00) from holding Aega ASA or give up 85.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sparebank 1 SR vs. Aega ASA
Performance |
| Timeline |
| Sparebank 1 SR |
| Aega ASA |
Sparebank and Aega ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Aega ASA
The main advantage of trading using opposite Sparebank and Aega ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Aega ASA 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 Aega ASA will offset losses from the drop in Aega ASA's long position.| Sparebank vs. Sparebank 1 SMN | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA | Sparebank vs. Sparebank 1 Nord Norge |
| Aega ASA vs. Norsk Hydro ASA | Aega ASA vs. Sparebank 1 SR | Aega ASA vs. Romsdal Sparebank | Aega ASA vs. Sogn Sparebank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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