Correlation Between SpareBank and Frontline
Can any of the company-specific risk be diversified away by investing in both SpareBank and Frontline 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 Frontline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SpareBank 1 stlandet and Frontline, you can compare the effects of market volatilities on SpareBank and Frontline 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 Frontline. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpareBank and Frontline.
Diversification Opportunities for SpareBank and Frontline
Excellent diversification
The 3 months correlation between SpareBank and Frontline is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SpareBank 1 stlandet and Frontline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontline 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 stlandet are associated (or correlated) with Frontline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontline has no effect on the direction of SpareBank i.e., SpareBank and Frontline go up and down completely randomly.
Pair Corralation between SpareBank and Frontline
Assuming the 90 days trading horizon SpareBank 1 stlandet is expected to under-perform the Frontline. But the stock apears to be less risky and, when comparing its historical volatility, SpareBank 1 stlandet is 2.23 times less risky than Frontline. The stock trades about 0.0 of its potential returns per unit of risk. The Frontline is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 20,112 in Frontline on September 2, 2025 and sell it today you would earn a total of 3,428 from holding Frontline or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
SpareBank 1 stlandet vs. Frontline
Performance |
| Timeline |
| SpareBank 1 stlandet |
| Frontline |
SpareBank and Frontline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SpareBank and Frontline
The main advantage of trading using opposite SpareBank and Frontline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpareBank position performs unexpectedly, Frontline 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 Frontline will offset losses from the drop in Frontline's long position.| SpareBank vs. Helgeland Sparebank | SpareBank vs. Morrow Bank ASA | SpareBank vs. Bien Sparebank ASA | SpareBank vs. Nordhealth AS |
| Frontline vs. Napatech AS | Frontline vs. Lokotech Group AS | Frontline vs. Arcticzymes Technologies ASA | Frontline vs. SpareBank 1 stlandet |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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