Correlation Between SALMAR ASA and SPAREBANKEN MORE

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

Diversification Opportunities for SALMAR ASA and SPAREBANKEN MORE

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between SALMAR and SPAREBANKEN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SALMAR ASA and SPAREBANKEN MORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAREBANKEN MORE and SALMAR ASA 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 SALMAR ASA are associated (or correlated) with SPAREBANKEN MORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAREBANKEN MORE has no effect on the direction of SALMAR ASA i.e., SALMAR ASA and SPAREBANKEN MORE go up and down completely randomly.

Pair Corralation between SALMAR ASA and SPAREBANKEN MORE

Assuming the 90 days trading horizon SALMAR ASA is expected to under-perform the SPAREBANKEN MORE. In addition to that, SALMAR ASA is 1.51 times more volatile than SPAREBANKEN MORE. It trades about -0.09 of its total potential returns per unit of risk. SPAREBANKEN MORE is currently generating about 0.16 per unit of volatility. If you would invest  7,293  in SPAREBANKEN MORE on August 31, 2022 and sell it today you would earn a total of  317.00  from holding SPAREBANKEN MORE or generate 4.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SALMAR ASA  vs.  SPAREBANKEN MORE

 Performance (%) 
       Timeline  
SALMAR ASA 
SALMAR Performance
0 of 100
Over the last 90 days SALMAR ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in December 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

SALMAR Price Channel

SPAREBANKEN MORE 
SPAREBANKEN Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in SPAREBANKEN MORE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, SPAREBANKEN MORE is not utilizing all of its potentials. The new stock price chaos, may contribute to medium-term losses for the stakeholders.

SPAREBANKEN Price Channel

SALMAR ASA and SPAREBANKEN MORE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SALMAR ASA and SPAREBANKEN MORE

The main advantage of trading using opposite SALMAR ASA and SPAREBANKEN MORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALMAR ASA position performs unexpectedly, SPAREBANKEN MORE 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 MORE will offset losses from the drop in SPAREBANKEN MORE's long position.
SALMAR ASA vs. PEXIP HOLDING ASA
The idea behind SALMAR ASA and SPAREBANKEN MORE 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 MORE vs. SPAREBANK 1 SMN
SPAREBANKEN MORE vs. PEXIP HOLDING 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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