Correlation Between Sparebank and Cambi ASA
Can any of the company-specific risk be diversified away by investing in both Sparebank and Cambi 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 Cambi 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 Cambi ASA, you can compare the effects of market volatilities on Sparebank and Cambi 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 Cambi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Cambi ASA.
Diversification Opportunities for Sparebank and Cambi ASA
Weak diversification
The 3 months correlation between Sparebank and Cambi is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Cambi ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambi 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 Cambi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambi ASA has no effect on the direction of Sparebank i.e., Sparebank and Cambi ASA go up and down completely randomly.
Pair Corralation between Sparebank and Cambi ASA
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.53 times more return on investment than Cambi ASA. However, Sparebank 1 SR is 1.9 times less risky than Cambi ASA. It trades about 0.07 of its potential returns per unit of risk. Cambi ASA is currently generating about 0.02 per unit of risk. If you would invest 11,859 in Sparebank 1 SR on September 12, 2024 and sell it today you would earn a total of 2,581 from holding Sparebank 1 SR or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.57% |
| Values | Daily Returns |
Sparebank 1 SR vs. Cambi ASA
Performance |
| Timeline |
| Sparebank 1 SR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Cambi ASA |
Sparebank and Cambi ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Cambi ASA
The main advantage of trading using opposite Sparebank and Cambi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Cambi 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 Cambi ASA will offset losses from the drop in Cambi ASA's long position.| Sparebank vs. Aurskog Sparebank | Sparebank vs. Helgeland Sparebank | Sparebank vs. Kongsberg Gruppen ASA | Sparebank vs. Napatech AS |
| Cambi ASA vs. Aker Horizons AS | Cambi ASA vs. Hexagon Purus As | Cambi ASA vs. Huddly AS | Cambi ASA vs. Everfuel AS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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