Correlation Between Prosafe SE and ASPEN PHARUNADR
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and ASPEN PHARUNADR 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 Prosafe SE and ASPEN PHARUNADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and ASPEN PHARUNADR 1, you can compare the effects of market volatilities on Prosafe SE and ASPEN PHARUNADR 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 Prosafe SE with a short position of ASPEN PHARUNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and ASPEN PHARUNADR.
Diversification Opportunities for Prosafe SE and ASPEN PHARUNADR
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prosafe and ASPEN is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and ASPEN PHARUNADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN PHARUNADR 1 and Prosafe SE 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 Prosafe SE are associated (or correlated) with ASPEN PHARUNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN PHARUNADR 1 has no effect on the direction of Prosafe SE i.e., Prosafe SE and ASPEN PHARUNADR go up and down completely randomly.
Pair Corralation between Prosafe SE and ASPEN PHARUNADR
Assuming the 90 days horizon Prosafe SE is expected to generate 17.4 times more return on investment than ASPEN PHARUNADR. However, Prosafe SE is 17.4 times more volatile than ASPEN PHARUNADR 1. It trades about 0.13 of its potential returns per unit of risk. ASPEN PHARUNADR 1 is currently generating about 0.01 per unit of risk. If you would invest 69.00 in Prosafe SE on October 28, 2024 and sell it today you would earn a total of 15.00 from holding Prosafe SE or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. ASPEN PHARUNADR 1
Performance |
| Timeline |
| Prosafe SE |
| ASPEN PHARUNADR 1 |
Prosafe SE and ASPEN PHARUNADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and ASPEN PHARUNADR
The main advantage of trading using opposite Prosafe SE and ASPEN PHARUNADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, ASPEN PHARUNADR 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 ASPEN PHARUNADR will offset losses from the drop in ASPEN PHARUNADR's long position.| Prosafe SE vs. TRAVEL LEISURE DL 01 | Prosafe SE vs. Playa Hotels Resorts | Prosafe SE vs. InPlay Oil Corp | Prosafe SE vs. Global Ship Lease |
| ASPEN PHARUNADR vs. TRAVEL LEISURE DL 01 | ASPEN PHARUNADR vs. HYATT HOTELS A | ASPEN PHARUNADR vs. Gaming and Leisure | ASPEN PHARUNADR vs. Pebblebrook Hotel Trust |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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