Correlation Between MPC Container and SpareBank

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

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

Diversification Opportunities for MPC Container and SpareBank

0.75

Correlation Coefficient

MPC Container  SpareBank

Poor diversification

The 3 months correlation between MPC and SpareBank is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MPC Container Ships 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 MPC Container 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 MPC Container Ships 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 MPC Container i.e., MPC Container and SpareBank go up and down completely randomly.

Pair Corralation between MPC Container and SpareBank

Assuming the 90 days trading horizon MPC Container Ships is expected to generate 2.26 times more return on investment than SpareBank. However, MPC Container is 2.26 times more volatile than SpareBank 1 stlandet. It trades about 0.16 of its potential returns per unit of risk. SpareBank 1 stlandet is currently generating about 0.19 per unit of risk. If you would invest  1,440  in MPC Container Ships on April 23, 2025 and sell it today you would earn a total of  398.00  from holding MPC Container Ships or generate 27.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

MPC Container Ships  vs.  SpareBank 1 stlandet

MPC Container Ships

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MPC Container Ships are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, MPC Container disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 MPC Container and SpareBank

The main advantage of trading using opposite MPC Container and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPC Container 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 MPC Container Ships 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.