Correlation Between Clean Seas and Sogn Sparebank

Can any of the company-specific risk be diversified away by investing in both Clean Seas and Sogn 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 Clean Seas and Sogn Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clean Seas Seafood and Sogn Sparebank, you can compare the effects of market volatilities on Clean Seas and Sogn 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 Clean Seas with a short position of Sogn Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Sogn Sparebank.

Diversification Opportunities for Clean Seas and Sogn Sparebank

-0.32

Correlation Coefficient

Clean Seas  Sogn Sparebank

Very good diversification

The 3 months correlation between Clean and Sogn is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Sogn Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogn Sparebank and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with Sogn Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogn Sparebank has no effect on the direction of Clean Seas i.e., Clean Seas and Sogn Sparebank go up and down completely randomly.

Pair Corralation between Clean Seas and Sogn Sparebank

Assuming the 90 days trading horizon Clean Seas Seafood is expected to under-perform the Sogn Sparebank. But the stock apears to be less risky and, when comparing its historical volatility, Clean Seas Seafood is 1.15 times less risky than Sogn Sparebank. The stock trades about -0.18 of its potential returns per unit of risk. The Sogn Sparebank is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  24,595  in Sogn Sparebank on April 23, 2025 and sell it today you would earn a total of  3,105  from holding Sogn Sparebank or generate 12.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clean Seas Seafood  vs.  Sogn Sparebank

Clean Seas Seafood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Seas Seafood has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sogn Sparebank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sogn Sparebank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Sogn Sparebank disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Seas and Sogn Sparebank

The main advantage of trading using opposite Clean Seas and Sogn Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Seas position performs unexpectedly, Sogn 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 Sogn Sparebank will offset losses from the drop in Sogn Sparebank's long position.

The idea behind Clean Seas Seafood and Sogn Sparebank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.