Correlation Between Sparebank and Kmc Properties
Can any of the company-specific risk be diversified away by investing in both Sparebank and Kmc Properties 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 Kmc Properties 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 Kmc Properties ASA, you can compare the effects of market volatilities on Sparebank and Kmc Properties 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 Kmc Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Kmc Properties.
Diversification Opportunities for Sparebank and Kmc Properties
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sparebank and Kmc is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Kmc Properties ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmc Properties 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 Kmc Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmc Properties ASA has no effect on the direction of Sparebank i.e., Sparebank and Kmc Properties go up and down completely randomly.
Pair Corralation between Sparebank and Kmc Properties
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.11 times more return on investment than Kmc Properties. However, Sparebank 1 SR is 8.92 times less risky than Kmc Properties. It trades about 0.04 of its potential returns per unit of risk. Kmc Properties ASA is currently generating about -0.08 per unit of risk. If you would invest 13,640 in Sparebank 1 SR on September 3, 2024 and sell it today you would earn a total of 800.00 from holding Sparebank 1 SR or generate 5.87% 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 SR vs. Kmc Properties ASA
Performance |
| Timeline |
| Sparebank 1 SR |
| Kmc Properties ASA |
Sparebank and Kmc Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Kmc Properties
The main advantage of trading using opposite Sparebank and Kmc Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Kmc Properties 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 Kmc Properties will offset losses from the drop in Kmc Properties' long position.| Sparebank vs. Sparebank 1 SMN | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA | Sparebank vs. Sparebank 1 Nord Norge |
| Kmc Properties vs. Entra ASA | Kmc Properties vs. Selvaag Bolig ASA | Kmc Properties vs. Olav Thon Eien | Kmc Properties vs. Pareto Bank ASA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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