Correlation Between Western Bulk and SpareBank

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

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

Diversification Opportunities for Western Bulk and SpareBank

-0.77

Correlation Coefficient

Western Bulk  SpareBank

Pay attention - limited upside

The 3 months correlation between Western and SpareBank is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Bulk Chartering 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 Western Bulk 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 Western Bulk Chartering 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 Western Bulk i.e., Western Bulk and SpareBank go up and down completely randomly.

Pair Corralation between Western Bulk and SpareBank

Assuming the 90 days trading horizon Western Bulk Chartering is expected to under-perform the SpareBank. In addition to that, Western Bulk is 2.85 times more volatile than SpareBank 1 stlandet. It trades about -0.07 of its total potential returns per unit of risk. SpareBank 1 stlandet is currently generating about 0.2 per unit of volatility. 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	98.39%
Values	Daily Returns

Western Bulk Chartering  vs.  SpareBank 1 stlandet

Western Bulk Chartering

Risk-Adjusted Performance

Very Weak

Over the last 90 days Western Bulk Chartering 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 essential 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.

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 Western Bulk and SpareBank

The main advantage of trading using opposite Western Bulk and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Bulk 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 Western Bulk Chartering 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.