Correlation Between Western Bulk and Helgeland Sparebank
Can any of the company-specific risk be diversified away by investing in both Western Bulk and Helgeland 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 Western Bulk and Helgeland Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Bulk Chartering and Helgeland Sparebank, you can compare the effects of market volatilities on Western Bulk and Helgeland 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 Western Bulk with a short position of Helgeland Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Bulk and Helgeland Sparebank.
Diversification Opportunities for Western Bulk and Helgeland Sparebank
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Helgeland is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Bulk Chartering and Helgeland Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helgeland Sparebank and Western Bulk 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 Western Bulk Chartering are associated (or correlated) with Helgeland Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helgeland Sparebank has no effect on the direction of Western Bulk i.e., Western Bulk and Helgeland Sparebank go up and down completely randomly.
Pair Corralation between Western Bulk and Helgeland Sparebank
Assuming the 90 days trading horizon Western Bulk Chartering is expected to under-perform the Helgeland Sparebank. In addition to that, Western Bulk is 1.51 times more volatile than Helgeland Sparebank. It trades about -0.19 of its total potential returns per unit of risk. Helgeland Sparebank is currently generating about -0.08 per unit of volatility. If you would invest 14,400 in Helgeland Sparebank on September 1, 2024 and sell it today you would lose (400.00) from holding Helgeland Sparebank or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Western Bulk Chartering vs. Helgeland Sparebank
Performance |
| Timeline |
| Western Bulk Chartering |
| Helgeland Sparebank |
Western Bulk and Helgeland Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Bulk and Helgeland Sparebank
The main advantage of trading using opposite Western Bulk and Helgeland Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Bulk position performs unexpectedly, Helgeland 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 Helgeland Sparebank will offset losses from the drop in Helgeland Sparebank's long position.| Western Bulk vs. Havila Shipping ASA | Western Bulk vs. Shelf Drilling | Western Bulk vs. Solstad Offsho | Western Bulk vs. Eidesvik Offshore ASA |
| Helgeland Sparebank vs. DnB ASA | Helgeland Sparebank vs. Gjensidige Forsikring ASA | Helgeland Sparebank vs. Orkla ASA | Helgeland Sparebank vs. Telenor 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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