Correlation Between DnB ASA and SoftwareOne Holding
Can any of the company-specific risk be diversified away by investing in both DnB ASA and SoftwareOne 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 DnB ASA and SoftwareOne Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DnB ASA and SoftwareOne Holding, you can compare the effects of market volatilities on DnB ASA and SoftwareOne 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 DnB ASA with a short position of SoftwareOne Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of DnB ASA and SoftwareOne Holding.
Diversification Opportunities for DnB ASA and SoftwareOne Holding
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DnB and SoftwareOne is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding DnB ASA and SoftwareOne Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftwareOne Holding 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 SoftwareOne Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftwareOne Holding has no effect on the direction of DnB ASA i.e., DnB ASA and SoftwareOne Holding go up and down completely randomly.
Pair Corralation between DnB ASA and SoftwareOne Holding
Assuming the 90 days trading horizon DnB ASA is expected to under-perform the SoftwareOne Holding. But the stock apears to be less risky and, when comparing its historical volatility, DnB ASA is 2.02 times less risky than SoftwareOne Holding. The stock trades about -0.06 of its potential returns per unit of risk. The SoftwareOne Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,255 in SoftwareOne Holding on June 12, 2025 and sell it today you would lose (59.00) from holding SoftwareOne Holding or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.56% |
| Values | Daily Returns |
DnB ASA vs. SoftwareOne Holding
Performance |
| Timeline |
| DnB ASA |
| SoftwareOne Holding |
DnB ASA and SoftwareOne Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DnB ASA and SoftwareOne Holding
The main advantage of trading using opposite DnB ASA and SoftwareOne Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DnB ASA position performs unexpectedly, SoftwareOne 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 SoftwareOne Holding will offset losses from the drop in SoftwareOne Holding's long position.| DnB ASA vs. Telenor ASA | DnB ASA vs. Storebrand ASA | DnB ASA vs. Orkla ASA | DnB ASA vs. Gjensidige Forsikring ASA |
| SoftwareOne Holding vs. Eidesvik Offshore ASA | SoftwareOne Holding vs. Nordic Mining ASA | SoftwareOne Holding vs. SD Standard Drilling | SoftwareOne Holding vs. Odfjell Drilling |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |