Correlation Between Storebrand ASA and Pareto Bank
Can any of the company-specific risk be diversified away by investing in both Storebrand ASA and Pareto Bank 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 Pareto Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Storebrand ASA and Pareto Bank ASA, you can compare the effects of market volatilities on Storebrand ASA and Pareto Bank 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 Pareto Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand ASA and Pareto Bank.
Diversification Opportunities for Storebrand ASA and Pareto Bank
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Storebrand and Pareto is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand ASA and Pareto Bank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pareto Bank 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 Pareto Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pareto Bank ASA has no effect on the direction of Storebrand ASA i.e., Storebrand ASA and Pareto Bank go up and down completely randomly.
Pair Corralation between Storebrand ASA and Pareto Bank
Assuming the 90 days trading horizon Storebrand ASA is expected to generate 0.97 times more return on investment than Pareto Bank. However, Storebrand ASA is 1.03 times less risky than Pareto Bank. It trades about 0.14 of its potential returns per unit of risk. Pareto Bank ASA is currently generating about 0.11 per unit of risk. If you would invest 11,410 in Storebrand ASA on November 2, 2024 and sell it today you would earn a total of 1,970 from holding Storebrand ASA or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Storebrand ASA vs. Pareto Bank ASA
Performance |
| Timeline |
| Storebrand ASA |
| Pareto Bank ASA |
Storebrand ASA and Pareto Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Storebrand ASA and Pareto Bank
The main advantage of trading using opposite Storebrand ASA and Pareto Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storebrand ASA position performs unexpectedly, Pareto Bank 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 Pareto Bank will offset losses from the drop in Pareto Bank's long position.| Storebrand ASA vs. Telenor ASA | Storebrand ASA vs. Orkla ASA | Storebrand ASA vs. Gjensidige Forsikring ASA | Storebrand ASA vs. Equinor ASA |
| Pareto Bank vs. Sparebank 1 SMN | Pareto Bank vs. Storebrand ASA | Pareto Bank vs. DnB ASA | Pareto Bank vs. Europris 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |