Correlation Between Golden Energy and SpareBank

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

By analyzing existing cross correlation between Golden Energy Offshore and SpareBank 1 stlandet, you can compare the effects of market volatilities on Golden Energy 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 Golden Energy with a short position of SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Energy and SpareBank.

Diversification Opportunities for Golden Energy and SpareBank

0.66

Correlation Coefficient

Golden Energy  SpareBank

Poor diversification

The 3 months correlation between Golden and SpareBank is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Golden Energy Offshore and SpareBank 1 stlandet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 stlandet and Golden Energy 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 Golden Energy Offshore 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 stlandet has no effect on the direction of Golden Energy i.e., Golden Energy and SpareBank go up and down completely randomly.

Pair Corralation between Golden Energy and SpareBank

Assuming the 90 days trading horizon Golden Energy is expected to generate 1.43 times less return on investment than SpareBank. In addition to that, Golden Energy is 2.53 times more volatile than SpareBank 1 stlandet. It trades about 0.05 of its total potential returns per unit of risk. SpareBank 1 stlandet is currently generating about 0.19 per unit of volatility. If you would invest  16,406  in SpareBank 1 stlandet on April 23, 2025 and sell it today you would earn a total of  2,454  from holding SpareBank 1 stlandet or generate 14.96% return on investment over 90 days.

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

Golden Energy Offshore  vs.  SpareBank 1 stlandet

Golden Energy Offshore

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Energy Offshore are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Golden Energy may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SpareBank 1 stlandet

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SpareBank 1 stlandet are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, SpareBank disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Energy and SpareBank

The main advantage of trading using opposite Golden Energy and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Energy 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.

The idea behind Golden Energy Offshore and SpareBank 1 stlandet 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.