Correlation Between DnB ASA and Pareto Bank
Can any of the company-specific risk be diversified away by investing in both DnB ASA and Pareto Bank 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 DnB ASA and Pareto Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DnB ASA and Pareto Bank ASA, you can compare the effects of market volatilities on DnB ASA and Pareto Bank 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 DnB ASA with a short position of Pareto Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DnB ASA and Pareto Bank.
Diversification Opportunities for DnB ASA and Pareto Bank
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DnB and Pareto is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding DnB ASA and Pareto Bank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pareto Bank ASA and DnB 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 DnB ASA are associated (or correlated) with Pareto Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pareto Bank ASA has no effect on the direction of DnB ASA i.e., DnB ASA and Pareto Bank go up and down completely randomly.
Pair Corralation between DnB ASA and Pareto Bank
Assuming the 90 days trading horizon DnB ASA is expected to under-perform the Pareto Bank. In addition to that, DnB ASA is 1.24 times more volatile than Pareto Bank ASA. It trades about -0.03 of its total potential returns per unit of risk. Pareto Bank ASA is currently generating about 0.12 per unit of volatility. If you would invest 8,300 in Pareto Bank ASA on June 3, 2025 and sell it today you would earn a total of 740.00 from holding Pareto Bank ASA or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DnB ASA vs. Pareto Bank ASA
Performance |
| Timeline |
| DnB ASA |
| Pareto Bank ASA |
DnB ASA and Pareto Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DnB ASA and Pareto Bank
The main advantage of trading using opposite DnB ASA and Pareto Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DnB ASA position performs unexpectedly, Pareto Bank 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 Pareto Bank will offset losses from the drop in Pareto Bank's long position.| DnB ASA vs. Telenor ASA | DnB ASA vs. Storebrand ASA | DnB ASA vs. Orkla ASA | DnB ASA vs. Gjensidige Forsikring ASA |
| Pareto Bank vs. SPAREBK 1 NORD NORGE | Pareto Bank vs. DnB ASA | Pareto Bank vs. Nordea Bank Abp | Pareto Bank vs. Sparebank 1 SMN |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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