Correlation Between Pareto Bank and Tysnes Sparebank
Can any of the company-specific risk be diversified away by investing in both Pareto Bank and Tysnes 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 Pareto Bank and Tysnes Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pareto Bank ASA and Tysnes Sparebank, you can compare the effects of market volatilities on Pareto Bank and Tysnes 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 Pareto Bank with a short position of Tysnes Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pareto Bank and Tysnes Sparebank.
Diversification Opportunities for Pareto Bank and Tysnes Sparebank
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pareto and Tysnes is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pareto Bank ASA and Tysnes Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tysnes Sparebank and Pareto 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 Pareto Bank ASA are associated (or correlated) with Tysnes Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tysnes Sparebank has no effect on the direction of Pareto Bank i.e., Pareto Bank and Tysnes Sparebank go up and down completely randomly.
Pair Corralation between Pareto Bank and Tysnes Sparebank
Assuming the 90 days trading horizon Pareto Bank is expected to generate 1.37 times less return on investment than Tysnes Sparebank. But when comparing it to its historical volatility, Pareto Bank ASA is 1.12 times less risky than Tysnes Sparebank. It trades about 0.13 of its potential returns per unit of risk. Tysnes Sparebank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 12,858 in Tysnes Sparebank on June 2, 2025 and sell it today you would earn a total of 1,802 from holding Tysnes Sparebank or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pareto Bank ASA vs. Tysnes Sparebank
Performance |
| Timeline |
| Pareto Bank ASA |
| Tysnes Sparebank |
Pareto Bank and Tysnes Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pareto Bank and Tysnes Sparebank
The main advantage of trading using opposite Pareto Bank and Tysnes Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pareto Bank position performs unexpectedly, Tysnes 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 Tysnes Sparebank will offset losses from the drop in Tysnes Sparebank's long position.| Pareto Bank vs. SPAREBK 1 NORD NORGE | Pareto Bank vs. DnB ASA | Pareto Bank vs. Nordea Bank Abp | Pareto Bank vs. Sparebank 1 SMN |
| Tysnes Sparebank vs. Helgeland Sparebank | Tysnes Sparebank vs. Kraft Bank Asa | Tysnes Sparebank vs. Skue Sparebank | Tysnes Sparebank vs. SoftwareOne Holding |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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