Correlation Between Storebrand ASA and Horisont Energi
Can any of the company-specific risk be diversified away by investing in both Storebrand ASA and Horisont Energi 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 Horisont Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Storebrand ASA and Horisont Energi AS, you can compare the effects of market volatilities on Storebrand ASA and Horisont Energi 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 Horisont Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand ASA and Horisont Energi.
Diversification Opportunities for Storebrand ASA and Horisont Energi
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Storebrand and Horisont is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand ASA and Horisont Energi AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horisont Energi AS 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 Horisont Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horisont Energi AS has no effect on the direction of Storebrand ASA i.e., Storebrand ASA and Horisont Energi go up and down completely randomly.
Pair Corralation between Storebrand ASA and Horisont Energi
Assuming the 90 days trading horizon Storebrand ASA is expected to generate 0.61 times more return on investment than Horisont Energi. However, Storebrand ASA is 1.64 times less risky than Horisont Energi. It trades about -0.13 of its potential returns per unit of risk. Horisont Energi AS is currently generating about -0.25 per unit of risk. If you would invest 12,770 in Storebrand ASA on August 29, 2024 and sell it today you would lose (580.00) from holding Storebrand ASA or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Storebrand ASA vs. Horisont Energi AS
Performance |
| Timeline |
| Storebrand ASA |
| Horisont Energi AS |
Storebrand ASA and Horisont Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Storebrand ASA and Horisont Energi
The main advantage of trading using opposite Storebrand ASA and Horisont Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storebrand ASA position performs unexpectedly, Horisont Energi 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 Horisont Energi will offset losses from the drop in Horisont Energi's long position.| Storebrand ASA vs. DnB ASA | Storebrand ASA vs. Gjensidige Forsikring ASA | Storebrand ASA vs. Orkla ASA | Storebrand ASA vs. Telenor ASA |
| Horisont Energi vs. River Tech plc | Horisont Energi vs. Polaris Media | Horisont Energi vs. Sogn Sparebank | Horisont Energi vs. Romerike 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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