Correlation Between Sunndal Sparebank and Cool Company
Can any of the company-specific risk be diversified away by investing in both Sunndal Sparebank and Cool Company 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 Cool Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunndal Sparebank and Cool Company Oy, you can compare the effects of market volatilities on Sunndal Sparebank and Cool Company 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 Cool Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunndal Sparebank and Cool Company.
Diversification Opportunities for Sunndal Sparebank and Cool Company
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunndal and Cool is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sunndal Sparebank and Cool Company Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company Oy 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 Cool Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company Oy has no effect on the direction of Sunndal Sparebank i.e., Sunndal Sparebank and Cool Company go up and down completely randomly.
Pair Corralation between Sunndal Sparebank and Cool Company
Assuming the 90 days trading horizon Sunndal Sparebank is expected to generate 1.23 times less return on investment than Cool Company. But when comparing it to its historical volatility, Sunndal Sparebank is 2.28 times less risky than Cool Company. It trades about 0.02 of its potential returns per unit of risk. Cool Company Oy is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,301 in Cool Company Oy on September 3, 2024 and sell it today you would lose (101.00) from holding Cool Company Oy or give up 1.09% 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. Cool Company Oy
Performance |
| Timeline |
| Sunndal Sparebank |
| Cool Company Oy |
Sunndal Sparebank and Cool Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunndal Sparebank and Cool Company
The main advantage of trading using opposite Sunndal Sparebank and Cool Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunndal Sparebank position performs unexpectedly, Cool Company 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 Cool Company will offset losses from the drop in Cool Company's long position.| Sunndal Sparebank vs. DnB ASA | Sunndal Sparebank vs. Sparebank 1 SR | Sunndal Sparebank vs. Sparebank 1 SMN | Sunndal Sparebank vs. Sparebanken Mre |
| Cool Company vs. Nordic Technology Group | Cool Company vs. Beerenberg AS | Cool Company vs. Shelf Drilling | Cool Company vs. Helgeland 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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