Correlation Between Instabank ASA and Envipco Holding

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

By analyzing existing cross correlation between Instabank ASA and Envipco Holding NV, you can compare the effects of market volatilities on Instabank ASA and Envipco Holding 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 Instabank ASA with a short position of Envipco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Envipco Holding.

Diversification Opportunities for Instabank ASA and Envipco Holding

0.17

Correlation Coefficient

Instabank ASA  Envipco Holding

Average diversification

The 3 months correlation between Instabank and Envipco is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Instabank ASA and Envipco Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envipco Holding NV and Instabank 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 Instabank ASA are associated (or correlated) with Envipco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envipco Holding NV has no effect on the direction of Instabank ASA i.e., Instabank ASA and Envipco Holding go up and down completely randomly.

Pair Corralation between Instabank ASA and Envipco Holding

Assuming the 90 days trading horizon Instabank ASA is expected to generate 0.47 times more return on investment than Envipco Holding. However, Instabank ASA is 2.11 times less risky than Envipco Holding. It trades about 0.11 of its potential returns per unit of risk. Envipco Holding NV is currently generating about 0.02 per unit of risk. If you would invest  204.00  in Instabank ASA on December 25, 2024 and sell it today you would earn a total of  18.00  from holding Instabank ASA or generate 8.82% return on investment over 90 days.

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

Instabank ASA  vs.  Envipco Holding NV

Instabank ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Instabank ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Instabank ASA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Envipco Holding NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Envipco Holding NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Envipco Holding is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Instabank ASA and Envipco Holding

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

The idea behind Instabank ASA and Envipco Holding NV 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.