Correlation Between Sunndal Sparebank and Aega ASA
Can any of the company-specific risk be diversified away by investing in both Sunndal Sparebank and Aega 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 Sunndal Sparebank and Aega ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunndal Sparebank and Aega ASA, you can compare the effects of market volatilities on Sunndal Sparebank and Aega 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 Sunndal Sparebank with a short position of Aega ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunndal Sparebank and Aega ASA.
Diversification Opportunities for Sunndal Sparebank and Aega ASA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunndal and Aega is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sunndal Sparebank and Aega ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aega ASA and Sunndal 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 Sunndal Sparebank are associated (or correlated) with Aega ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aega ASA has no effect on the direction of Sunndal Sparebank i.e., Sunndal Sparebank and Aega ASA go up and down completely randomly.
Pair Corralation between Sunndal Sparebank and Aega ASA
Assuming the 90 days trading horizon Sunndal Sparebank is expected to generate 7.48 times less return on investment than Aega ASA. But when comparing it to its historical volatility, Sunndal Sparebank is 15.23 times less risky than Aega ASA. It trades about 0.03 of its potential returns per unit of risk. Aega ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 237.00 in Aega ASA on September 2, 2024 and sell it today you would lose (211.00) from holding Aega ASA or give up 89.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunndal Sparebank vs. Aega ASA
Performance |
| Timeline |
| Sunndal Sparebank |
| Aega ASA |
Sunndal Sparebank and Aega ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunndal Sparebank and Aega ASA
The main advantage of trading using opposite Sunndal Sparebank and Aega ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunndal Sparebank position performs unexpectedly, Aega 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 Aega ASA will offset losses from the drop in Aega ASA's long position.| Sunndal Sparebank vs. Skue Sparebank | Sunndal Sparebank vs. Sparebanken Ost | Sunndal Sparebank vs. Dolphin Drilling AS | Sunndal Sparebank vs. NorAm Drilling AS |
| Aega ASA vs. 5Th Planet Games | Aega ASA vs. River Tech plc | Aega ASA vs. Odfjell Technology | Aega ASA vs. SD Standard Drilling |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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