Correlation Between Helgeland Sparebank and Sparebank
Can any of the company-specific risk be diversified away by investing in both Helgeland Sparebank and 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 Helgeland Sparebank and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helgeland Sparebank and Sparebank 1 SMN, you can compare the effects of market volatilities on Helgeland Sparebank and 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 Helgeland Sparebank with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helgeland Sparebank and Sparebank.
Diversification Opportunities for Helgeland Sparebank and Sparebank
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Helgeland and Sparebank is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Helgeland Sparebank and Sparebank 1 SMN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SMN and Helgeland 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 Helgeland Sparebank are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SMN has no effect on the direction of Helgeland Sparebank i.e., Helgeland Sparebank and Sparebank go up and down completely randomly.
Pair Corralation between Helgeland Sparebank and Sparebank
Assuming the 90 days trading horizon Helgeland Sparebank is expected to generate 2.0 times more return on investment than Sparebank. However, Helgeland Sparebank is 2.0 times more volatile than Sparebank 1 SMN. It trades about 0.07 of its potential returns per unit of risk. Sparebank 1 SMN is currently generating about 0.05 per unit of risk. If you would invest 16,300 in Helgeland Sparebank on March 28, 2025 and sell it today you would earn a total of 1,500 from holding Helgeland Sparebank or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helgeland Sparebank vs. Sparebank 1 SMN
Performance |
| Timeline |
| Helgeland Sparebank |
| Sparebank 1 SMN |
Helgeland Sparebank and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helgeland Sparebank and Sparebank
The main advantage of trading using opposite Helgeland Sparebank and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helgeland Sparebank position performs unexpectedly, 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 Sparebank will offset losses from the drop in Sparebank's long position.| Helgeland Sparebank vs. Sparebank 1 Nord Norge | Helgeland Sparebank vs. Sparebank 1 SMN | Helgeland Sparebank vs. Sparebanken Vest | Helgeland Sparebank vs. Sparebanken Mre |
| Sparebank vs. Sparebank 1 Nord Norge | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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