Correlation Between Thor Mining and Sparebank
Can any of the company-specific risk be diversified away by investing in both Thor Mining and 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 Thor Mining and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Mining PLC and Sparebank 1 SR, you can compare the effects of market volatilities on Thor Mining and 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 Thor Mining with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and Sparebank.
Diversification Opportunities for Thor Mining and Sparebank
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thor and Sparebank is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Thor Mining 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 Thor Mining PLC are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Thor Mining i.e., Thor Mining and Sparebank go up and down completely randomly.
Pair Corralation between Thor Mining and Sparebank
Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the Sparebank. In addition to that, Thor Mining is 4.56 times more volatile than Sparebank 1 SR. It trades about -0.05 of its total potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.21 per unit of volatility. If you would invest 14,480 in Sparebank 1 SR on October 30, 2024 and sell it today you would earn a total of 1,060 from holding Sparebank 1 SR or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Mining PLC vs. Sparebank 1 SR
Performance |
| Timeline |
| Thor Mining PLC |
| Sparebank 1 SR |
Thor Mining and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and Sparebank
The main advantage of trading using opposite Thor Mining and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining position performs unexpectedly, 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 Sparebank will offset losses from the drop in Sparebank's long position.| Thor Mining vs. Flutter Entertainment PLC | Thor Mining vs. Catalyst Media Group | Thor Mining vs. AcadeMedia AB | Thor Mining vs. Ross Stores |
| Sparebank vs. Wheaton Precious Metals | Sparebank vs. Indutrade AB | Sparebank vs. Fulcrum Metals PLC | Sparebank vs. Flow Traders NV |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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