Correlation Between Storebrand ASA and Entra ASA
Can any of the company-specific risk be diversified away by investing in both Storebrand ASA and Entra 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 Storebrand ASA and Entra ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Storebrand ASA and Entra ASA, you can compare the effects of market volatilities on Storebrand ASA and Entra 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 Storebrand ASA with a short position of Entra ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand ASA and Entra ASA.
Diversification Opportunities for Storebrand ASA and Entra ASA
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Storebrand and Entra is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand ASA and Entra ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entra ASA and Storebrand ASA 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 Storebrand ASA are associated (or correlated) with Entra ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entra ASA has no effect on the direction of Storebrand ASA i.e., Storebrand ASA and Entra ASA go up and down completely randomly.
Pair Corralation between Storebrand ASA and Entra ASA
Assuming the 90 days trading horizon Storebrand ASA is expected to under-perform the Entra ASA. But the stock apears to be less risky and, when comparing its historical volatility, Storebrand ASA is 1.14 times less risky than Entra ASA. The stock trades about -0.14 of its potential returns per unit of risk. The Entra ASA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 11,620 in Entra ASA on November 27, 2024 and sell it today you would lose (80.00) from holding Entra ASA or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Storebrand ASA vs. Entra ASA
Performance |
| Timeline |
| Storebrand ASA |
| Entra ASA |
Storebrand ASA and Entra ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Storebrand ASA and Entra ASA
The main advantage of trading using opposite Storebrand ASA and Entra ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storebrand ASA position performs unexpectedly, Entra 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 Entra ASA will offset losses from the drop in Entra ASA's long position.| Storebrand ASA vs. DnB ASA | Storebrand ASA vs. Gjensidige Forsikring ASA | Storebrand ASA vs. Orkla ASA | Storebrand ASA vs. Telenor ASA |
| Entra ASA vs. Gjensidige Forsikring ASA | Entra ASA vs. Storebrand ASA | Entra ASA vs. Olav Thon Eien | Entra ASA vs. DnB 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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