Correlation Between Kraft Bank and Sunndal Sparebank
Can any of the company-specific risk be diversified away by investing in both Kraft Bank and Sunndal 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 Kraft Bank and Sunndal Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Bank Asa and Sunndal Sparebank, you can compare the effects of market volatilities on Kraft Bank and Sunndal 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 Kraft Bank with a short position of Sunndal Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Sunndal Sparebank.
Diversification Opportunities for Kraft Bank and Sunndal Sparebank
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kraft and Sunndal is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa and Sunndal Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunndal Sparebank and Kraft Bank 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 Kraft Bank Asa are associated (or correlated) with Sunndal Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunndal Sparebank has no effect on the direction of Kraft Bank i.e., Kraft Bank and Sunndal Sparebank go up and down completely randomly.
Pair Corralation between Kraft Bank and Sunndal Sparebank
Assuming the 90 days trading horizon Kraft Bank is expected to generate 7.2 times less return on investment than Sunndal Sparebank. In addition to that, Kraft Bank is 1.9 times more volatile than Sunndal Sparebank. It trades about 0.01 of its total potential returns per unit of risk. Sunndal Sparebank is currently generating about 0.08 per unit of volatility. If you would invest 11,000 in Sunndal Sparebank on September 5, 2024 and sell it today you would earn a total of 550.00 from holding Sunndal Sparebank or generate 5.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Kraft Bank Asa vs. Sunndal Sparebank
Performance |
Timeline |
Kraft Bank Asa |
Sunndal Sparebank |
Kraft Bank and Sunndal Sparebank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kraft Bank and Sunndal Sparebank
The main advantage of trading using opposite Kraft Bank and Sunndal Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank position performs unexpectedly, Sunndal 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 Sunndal Sparebank will offset losses from the drop in Sunndal Sparebank's long position.Kraft Bank vs. Morrow Bank ASA | Kraft Bank vs. Napatech AS | Kraft Bank vs. Polaris Media | Kraft Bank vs. Odfjell Drilling |
Sunndal Sparebank vs. Nordic Technology Group | Sunndal Sparebank vs. Kraft Bank Asa | Sunndal Sparebank vs. Romsdal Sparebank | Sunndal Sparebank vs. Sogn Sparebank |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |