Correlation Between Sparebank and Sparebanken Mre

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sparebank and Sparebanken Mre 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 Sparebank and Sparebanken Mre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SMN and Sparebanken Mre, you can compare the effects of market volatilities on Sparebank and Sparebanken Mre 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 Sparebank with a short position of Sparebanken Mre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Sparebanken Mre.

Diversification Opportunities for Sparebank and Sparebanken Mre

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Sparebank and Sparebanken is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SMN and Sparebanken Mre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Mre and 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 Sparebank 1 SMN are associated (or correlated) with Sparebanken Mre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Mre has no effect on the direction of Sparebank i.e., Sparebank and Sparebanken Mre go up and down completely randomly.

Pair Corralation between Sparebank and Sparebanken Mre

Assuming the 90 days trading horizon Sparebank is expected to generate 1.03 times less return on investment than Sparebanken Mre. In addition to that, Sparebank is 1.03 times more volatile than Sparebanken Mre. It trades about 0.05 of its total potential returns per unit of risk. Sparebanken Mre is currently generating about 0.05 per unit of volatility. If you would invest  5,594  in Sparebanken Mre on September 3, 2022 and sell it today you would earn a total of  2,106  from holding Sparebanken Mre or generate 37.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sparebank 1 SMN  vs.  Sparebanken Mre

 Performance (%) 
       Timeline  
Sparebank 1 SMN 
Sparebank Performance
0 of 100
Over the last 90 days Sparebank 1 SMN has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Sparebank is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Sparebank Price Channel

Sparebanken Mre 
Sparebanken Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sparebanken Mre are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish basic indicators, Sparebanken Mre may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Sparebanken Price Channel

Sparebank and Sparebanken Mre Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sparebank and Sparebanken Mre

The main advantage of trading using opposite Sparebank and Sparebanken Mre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Sparebanken Mre 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 Sparebanken Mre will offset losses from the drop in Sparebanken Mre's long position.
The idea behind Sparebank 1 SMN and Sparebanken Mre pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Sparebanken Mre vs. Sparebank 1 SMN
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go