Correlation Between Shelf Drilling and Jaeren Sparebank

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Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and Jaeren 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 Shelf Drilling and Jaeren Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelf Drilling and Jaeren Sparebank, you can compare the effects of market volatilities on Shelf Drilling and Jaeren 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 Shelf Drilling with a short position of Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and Jaeren Sparebank.

Diversification Opportunities for Shelf Drilling and Jaeren Sparebank

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Shelf and Jaeren is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank and Shelf Drilling 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 Shelf Drilling are associated (or correlated) with Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Jaeren Sparebank go up and down completely randomly.

Pair Corralation between Shelf Drilling and Jaeren Sparebank

Assuming the 90 days trading horizon Shelf Drilling is expected to generate 4.72 times more return on investment than Jaeren Sparebank. However, Shelf Drilling is 4.72 times more volatile than Jaeren Sparebank. It trades about 0.17 of its potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.03 per unit of risk. If you would invest  609.00  in Shelf Drilling on April 23, 2025 and sell it today you would earn a total of  301.00  from holding Shelf Drilling or generate 49.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Shelf Drilling  vs.  Jaeren Sparebank

 Performance 
       Timeline  
Shelf Drilling 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Shelf Drilling are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Shelf Drilling disclosed solid returns over the last few months and may actually be approaching a breakup point.
Jaeren Sparebank 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Jaeren Sparebank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Jaeren Sparebank is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Shelf Drilling and Jaeren Sparebank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shelf Drilling and Jaeren Sparebank

The main advantage of trading using opposite Shelf Drilling and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, Jaeren 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank's long position.
The idea behind Shelf Drilling and Jaeren 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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