Correlation Between Sparebanken Vest and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Sparebanken Vest and Nordic Mining 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 Nordic Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebanken Vest and Nordic Mining ASA, you can compare the effects of market volatilities on Sparebanken Vest and Nordic Mining 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 Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebanken Vest and Nordic Mining.
Diversification Opportunities for Sparebanken Vest and Nordic Mining
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sparebanken and Nordic is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sparebanken Vest and Nordic Mining ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Mining ASA 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 Nordic Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Mining ASA has no effect on the direction of Sparebanken Vest i.e., Sparebanken Vest and Nordic Mining go up and down completely randomly.
Pair Corralation between Sparebanken Vest and Nordic Mining
Assuming the 90 days trading horizon Sparebanken Vest is expected to generate 0.75 times more return on investment than Nordic Mining. However, Sparebanken Vest is 1.34 times less risky than Nordic Mining. It trades about 0.0 of its potential returns per unit of risk. Nordic Mining ASA is currently generating about -0.04 per unit of risk. If you would invest 13,374 in Sparebanken Vest on August 28, 2024 and sell it today you would lose (24.00) from holding Sparebanken Vest or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebanken Vest vs. Nordic Mining ASA
Performance |
| Timeline |
| Sparebanken Vest |
| Nordic Mining ASA |
Sparebanken Vest and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebanken Vest and Nordic Mining
The main advantage of trading using opposite Sparebanken Vest and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebanken Vest position performs unexpectedly, Nordic Mining 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 Nordic Mining will offset losses from the drop in Nordic Mining'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 |
| Nordic Mining vs. 5Th Planet Games | Nordic Mining vs. Napatech AS | Nordic Mining vs. Polaris Media | Nordic Mining vs. Xplora Technologies As |
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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