Correlation Between Helgeland Sparebank and Vow ASA

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

Diversification Opportunities for Helgeland Sparebank and Vow ASA

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Helgeland and Vow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Helgeland Sparebank and Vow ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow ASA 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 Vow ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow ASA has no effect on the direction of Helgeland Sparebank i.e., Helgeland Sparebank and Vow ASA go up and down completely randomly.

Pair Corralation between Helgeland Sparebank and Vow ASA

Assuming the 90 days trading horizon Helgeland Sparebank is expected to generate 0.22 times more return on investment than Vow ASA. However, Helgeland Sparebank is 4.45 times less risky than Vow ASA. It trades about 0.13 of its potential returns per unit of risk. Vow ASA is currently generating about -0.2 per unit of risk. If you would invest  14,386  in Helgeland Sparebank on October 22, 2024 and sell it today you would earn a total of  216.00  from holding Helgeland Sparebank or generate 1.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Helgeland Sparebank  vs.  Vow ASA

 Performance 
       Timeline  
Helgeland Sparebank 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Helgeland Sparebank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Helgeland Sparebank is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Vow ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vow ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Helgeland Sparebank and Vow ASA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Helgeland Sparebank and Vow ASA

The main advantage of trading using opposite Helgeland Sparebank and Vow ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helgeland Sparebank position performs unexpectedly, Vow ASA 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 Vow ASA will offset losses from the drop in Vow ASA's long position.
The idea behind Helgeland Sparebank and Vow ASA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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