Correlation Between TYSNES SPAREBANK and Warner Music

Can any of the company-specific risk be diversified away by investing in both TYSNES SPAREBANK and Warner Music 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 TYSNES SPAREBANK and Warner Music into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TYSNES SPAREBANK NK and Warner Music Group, you can compare the effects of market volatilities on TYSNES SPAREBANK and Warner Music 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 TYSNES SPAREBANK with a short position of Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of TYSNES SPAREBANK and Warner Music.

Diversification Opportunities for TYSNES SPAREBANK and Warner Music

-0.56

Correlation Coefficient

TYSNES SPAREBANK  Warner Music

Excellent diversification

The 3 months correlation between TYSNES and Warner is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding TYSNES SPAREBANK NK and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group and TYSNES 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 TYSNES SPAREBANK NK are associated (or correlated) with Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of TYSNES SPAREBANK i.e., TYSNES SPAREBANK and Warner Music go up and down completely randomly.

Pair Corralation between TYSNES SPAREBANK and Warner Music

Assuming the 90 days horizon TYSNES SPAREBANK NK is expected to generate 0.52 times more return on investment than Warner Music. However, TYSNES SPAREBANK NK is 1.93 times less risky than Warner Music. It trades about -0.16 of its potential returns per unit of risk. Warner Music Group is currently generating about -0.1 per unit of risk. If you would invest  977.00  in TYSNES SPAREBANK NK on September 28, 2024 and sell it today you would lose (21.00) from holding TYSNES SPAREBANK NK or give up 2.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TYSNES SPAREBANK NK  vs.  Warner Music Group

TYSNES SPAREBANK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TYSNES SPAREBANK NK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Warner Music Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Warner Music Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Warner Music may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TYSNES SPAREBANK and Warner Music

The main advantage of trading using opposite TYSNES SPAREBANK and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TYSNES SPAREBANK position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.

The idea behind TYSNES SPAREBANK NK and Warner Music Group 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .