Correlation Between Sparebank and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Sparebank and Flow Traders 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 Sparebank and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Flow Traders NV, you can compare the effects of market volatilities on Sparebank and Flow Traders 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 Sparebank with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Flow Traders.
Diversification Opportunities for Sparebank and Flow Traders
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sparebank and Flow is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV and 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 Sparebank 1 SR are associated (or correlated) with Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Sparebank i.e., Sparebank and Flow Traders go up and down completely randomly.
Pair Corralation between Sparebank and Flow Traders
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.66 times more return on investment than Flow Traders. However, Sparebank 1 SR is 1.51 times less risky than Flow Traders. It trades about 0.07 of its potential returns per unit of risk. Flow Traders NV is currently generating about -0.04 per unit of risk. If you would invest 17,600 in Sparebank 1 SR on September 10, 2025 and sell it today you would earn a total of 860.00 from holding Sparebank 1 SR or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 SR vs. Flow Traders NV
Performance |
| Timeline |
| Sparebank 1 SR |
| Flow Traders NV |
Sparebank and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Flow Traders
The main advantage of trading using opposite Sparebank and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| Sparebank vs. United Utilities Group | Sparebank vs. Monster Beverage Corp | Sparebank vs. Neo Energy Metals | Sparebank vs. Molson Coors Beverage |
| Flow Traders vs. Auction Technology Group | Flow Traders vs. Software Circle plc | Flow Traders vs. Cognizant Technology Solutions | Flow Traders vs. Ebro Foods |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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