Correlation Between Sparebanken Vest and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Sparebanken Vest and Grong 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 Sparebanken Vest and Grong Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Vest and Grong Sparebank, you can compare the effects of market volatilities on Sparebanken Vest and Grong 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 Sparebanken Vest with a short position of Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Vest and Grong Sparebank.
Diversification Opportunities for Sparebanken Vest and Grong Sparebank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sparebanken and Grong is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Vest and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank and Sparebanken Vest 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 Sparebanken Vest are associated (or correlated) with Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Sparebanken Vest i.e., Sparebanken Vest and Grong Sparebank go up and down completely randomly.
Pair Corralation between Sparebanken Vest and Grong Sparebank
Assuming the 90 days trading horizon Sparebanken Vest is expected to generate 3.58 times less return on investment than Grong Sparebank. In addition to that, Sparebanken Vest is 1.07 times more volatile than Grong Sparebank. It trades about 0.0 of its total potential returns per unit of risk. Grong Sparebank is currently generating about 0.01 per unit of volatility. If you would invest 14,900 in Grong Sparebank on September 2, 2024 and sell it today you would earn a total of 96.00 from holding Grong Sparebank or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebanken Vest vs. Grong Sparebank
Performance |
| Timeline |
| Sparebanken Vest |
| Grong Sparebank |
Sparebanken Vest and Grong Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Vest and Grong Sparebank
The main advantage of trading using opposite Sparebanken Vest and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Vest position performs unexpectedly, Grong 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 Grong Sparebank will offset losses from the drop in Grong Sparebank's long position.| Sparebanken Vest vs. Sparebank 1 SMN | Sparebanken Vest vs. Sparebank 1 Nord Norge | Sparebanken Vest vs. Storebrand ASA | Sparebanken Vest vs. Pareto Bank ASA |
| Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebank 1 Nord Norge | Grong Sparebank vs. Sparebanken Vest | Grong Sparebank vs. Sparebank 1 Ostfold |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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