Correlation Between Helgeland Sparebank and Integrated Wind

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

By analyzing existing cross correlation between Helgeland Sparebank and Integrated Wind Solutions, you can compare the effects of market volatilities on Helgeland Sparebank and Integrated Wind 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 Helgeland Sparebank with a short position of Integrated Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helgeland Sparebank and Integrated Wind.

Diversification Opportunities for Helgeland Sparebank and Integrated Wind

-0.31

Correlation Coefficient

Helgeland Sparebank  Integrated Wind

Very good diversification

The 3 months correlation between Helgeland and Integrated is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Helgeland Sparebank and Integrated Wind Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Wind Solutions and Helgeland 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 Helgeland Sparebank are associated (or correlated) with Integrated Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Wind Solutions has no effect on the direction of Helgeland Sparebank i.e., Helgeland Sparebank and Integrated Wind go up and down completely randomly.

Pair Corralation between Helgeland Sparebank and Integrated Wind

Assuming the 90 days trading horizon Helgeland Sparebank is expected to generate 0.61 times more return on investment than Integrated Wind. However, Helgeland Sparebank is 1.64 times less risky than Integrated Wind. It trades about 0.1 of its potential returns per unit of risk. Integrated Wind Solutions is currently generating about -0.05 per unit of risk. If you would invest  13,502  in Helgeland Sparebank on October 7, 2024 and sell it today you would earn a total of  996.00  from holding Helgeland Sparebank or generate 7.38% return on investment over 90 days.

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

Helgeland Sparebank  vs.  Integrated Wind Solutions

Helgeland Sparebank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Helgeland Sparebank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Helgeland Sparebank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Integrated Wind Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Wind Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Integrated Wind is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Helgeland Sparebank and Integrated Wind

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

The idea behind Helgeland Sparebank and Integrated Wind Solutions 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 CEOs Directory module to screen CEOs from public companies around the world.