Correlation Between Romerike Sparebank and Instabank ASA

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

By analyzing existing cross correlation between Romerike Sparebank and Instabank ASA, you can compare the effects of market volatilities on Romerike Sparebank and Instabank ASA 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 Romerike Sparebank with a short position of Instabank ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romerike Sparebank and Instabank ASA.

Diversification Opportunities for Romerike Sparebank and Instabank ASA

-0.07

Correlation Coefficient

Romerike Sparebank  Instabank ASA

Good diversification

The 3 months correlation between Romerike and Instabank is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Romerike Sparebank and Instabank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instabank ASA and Romerike 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 Romerike Sparebank are associated (or correlated) with Instabank ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instabank ASA has no effect on the direction of Romerike Sparebank i.e., Romerike Sparebank and Instabank ASA go up and down completely randomly.

Pair Corralation between Romerike Sparebank and Instabank ASA

Assuming the 90 days trading horizon Romerike Sparebank is expected to generate 9.59 times less return on investment than Instabank ASA. But when comparing it to its historical volatility, Romerike Sparebank is 1.07 times less risky than Instabank ASA. It trades about 0.03 of its potential returns per unit of risk. Instabank ASA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  231.00  in Instabank ASA on May 7, 2025 and sell it today you would earn a total of  43.00  from holding Instabank ASA or generate 18.61% return on investment over 90 days.

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

Romerike Sparebank  vs.  Instabank ASA

Romerike Sparebank

Risk-Adjusted Performance

Weak

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

Instabank ASA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Instabank ASA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Instabank ASA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Romerike Sparebank and Instabank ASA

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

The idea behind Romerike Sparebank and Instabank ASA 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..