Correlation Between Storebrand ASA and MPC Container
Can any of the company-specific risk be diversified away by investing in both Storebrand ASA and MPC Container 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 MPC Container into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Storebrand ASA and MPC Container Ships, you can compare the effects of market volatilities on Storebrand ASA and MPC Container 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 MPC Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand ASA and MPC Container.
Diversification Opportunities for Storebrand ASA and MPC Container
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Storebrand and MPC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand ASA and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships 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 MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of Storebrand ASA i.e., Storebrand ASA and MPC Container go up and down completely randomly.
Pair Corralation between Storebrand ASA and MPC Container
Assuming the 90 days trading horizon Storebrand ASA is expected to under-perform the MPC Container. But the stock apears to be less risky and, when comparing its historical volatility, Storebrand ASA is 2.29 times less risky than MPC Container. The stock trades about -0.09 of its potential returns per unit of risk. The MPC Container Ships is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,169 in MPC Container Ships on September 1, 2024 and sell it today you would lose (6.00) from holding MPC Container Ships or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Storebrand ASA vs. MPC Container Ships
Performance |
| Timeline |
| Storebrand ASA |
| MPC Container Ships |
Storebrand ASA and MPC Container Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Storebrand ASA and MPC Container
The main advantage of trading using opposite Storebrand ASA and MPC Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storebrand ASA position performs unexpectedly, MPC Container 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 MPC Container will offset losses from the drop in MPC Container's long position.| Storebrand ASA vs. DnB ASA | Storebrand ASA vs. Gjensidige Forsikring ASA | Storebrand ASA vs. Orkla ASA | Storebrand ASA vs. Telenor ASA |
| MPC Container vs. Havila Shipping ASA | MPC Container vs. Shelf Drilling | MPC Container vs. Solstad Offsho | MPC Container vs. Eidesvik Offshore 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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