Correlation Between Sunndal Sparebank and Bien Sparebank
Can any of the company-specific risk be diversified away by investing in both Sunndal Sparebank and Bien Sparebank 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 Bien Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunndal Sparebank and Bien Sparebank ASA, you can compare the effects of market volatilities on Sunndal Sparebank and Bien Sparebank 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 Bien Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunndal Sparebank and Bien Sparebank.
Diversification Opportunities for Sunndal Sparebank and Bien Sparebank
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunndal and Bien is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sunndal Sparebank and Bien Sparebank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bien Sparebank 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 Bien Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bien Sparebank ASA has no effect on the direction of Sunndal Sparebank i.e., Sunndal Sparebank and Bien Sparebank go up and down completely randomly.
Pair Corralation between Sunndal Sparebank and Bien Sparebank
Assuming the 90 days trading horizon Sunndal Sparebank is expected to under-perform the Bien Sparebank. But the stock apears to be less risky and, when comparing its historical volatility, Sunndal Sparebank is 2.33 times less risky than Bien Sparebank. The stock trades about -0.02 of its potential returns per unit of risk. The Bien Sparebank ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 12,000 in Bien Sparebank ASA on October 21, 2024 and sell it today you would earn a total of 100.00 from holding Bien Sparebank ASA or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunndal Sparebank vs. Bien Sparebank ASA
Performance |
| Timeline |
| Sunndal Sparebank |
| Bien Sparebank ASA |
Sunndal Sparebank and Bien Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunndal Sparebank and Bien Sparebank
The main advantage of trading using opposite Sunndal Sparebank and Bien Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunndal Sparebank position performs unexpectedly, Bien Sparebank 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 Bien Sparebank will offset losses from the drop in Bien Sparebank's long position.| Sunndal Sparebank vs. 5Th Planet Games | Sunndal Sparebank vs. Arcticzymes Technologies ASA | Sunndal Sparebank vs. Skue Sparebank | Sunndal Sparebank vs. Aurskog Sparebank |
| Bien Sparebank vs. Norwegian Air Shuttle | Bien Sparebank vs. Sunndal Sparebank | Bien Sparebank vs. Grong Sparebank | Bien Sparebank 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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