Correlation Between SpareBank and ContextVision

Can any of the company-specific risk be diversified away by investing in both SpareBank and ContextVision 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 ContextVision 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 ContextVision AB, you can compare the effects of market volatilities on SpareBank and ContextVision 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 ContextVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpareBank and ContextVision.

Diversification Opportunities for SpareBank and ContextVision

-0.63

Correlation Coefficient

SpareBank  ContextVision

Excellent diversification

The 3 months correlation between SpareBank and ContextVision is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding SpareBank 1 stlandet and ContextVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ContextVision AB 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 ContextVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ContextVision AB has no effect on the direction of SpareBank i.e., SpareBank and ContextVision go up and down completely randomly.

Pair Corralation between SpareBank and ContextVision

Assuming the 90 days trading horizon SpareBank 1 stlandet is expected to generate 0.4 times more return on investment than ContextVision. However, SpareBank 1 stlandet is 2.52 times less risky than ContextVision. It trades about 0.2 of its potential returns per unit of risk. ContextVision AB is currently generating about -0.14 per unit of risk. If you would invest  16,398  in SpareBank 1 stlandet on April 24, 2025 and sell it today you would earn a total of  2,504  from holding SpareBank 1 stlandet or generate 15.27% return on investment over 90 days.

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

SpareBank 1 stlandet  vs.  ContextVision AB

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.

ContextVision AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days ContextVision AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with SpareBank and ContextVision

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

The idea behind SpareBank 1 stlandet and ContextVision AB 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.