Correlation Between Getty Images and SpareBank

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

By analyzing existing cross correlation between Getty Images Holdings and SpareBank 1 SR Bank, you can compare the effects of market volatilities on Getty Images 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 Getty Images with a short position of SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and SpareBank.

Diversification Opportunities for Getty Images and SpareBank

0.0

Correlation Coefficient

Getty Images  SpareBank

Pay attention - limited upside

The 3 months correlation between Getty and SpareBank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and SpareBank 1 SR Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 SR and Getty Images 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 Getty Images Holdings 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 Getty Images i.e., Getty Images and SpareBank go up and down completely randomly.

Pair Corralation between Getty Images and SpareBank

Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the SpareBank. But the stock apears to be less risky and, when comparing its historical volatility, Getty Images Holdings is 1.31 times less risky than SpareBank. The stock trades about -0.02 of its potential returns per unit of risk. The SpareBank 1 SR Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  715.00  in SpareBank 1 SR Bank on October 3, 2024 and sell it today you would earn a total of  750.00  from holding SpareBank 1 SR Bank or generate 104.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	64.04%
Values	Daily Returns

Getty Images Holdings  vs.  SpareBank 1 SR Bank

Getty Images Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SpareBank 1 SR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SpareBank 1 SR Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, SpareBank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Getty Images and SpareBank

The main advantage of trading using opposite Getty Images and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images 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.

The idea behind Getty Images Holdings and SpareBank 1 SR Bank 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..