Correlation Between Grand Ocean and Aker Technology
Can any of the company-specific risk be diversified away by investing in both Grand Ocean and Aker Technology 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 Grand Ocean and Aker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and Aker Technology Co, you can compare the effects of market volatilities on Grand Ocean and Aker Technology 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 Grand Ocean with a short position of Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Aker Technology.
Diversification Opportunities for Grand Ocean and Aker Technology
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grand and Aker is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology and Grand Ocean 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 Grand Ocean Retail are associated (or correlated) with Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Grand Ocean i.e., Grand Ocean and Aker Technology go up and down completely randomly.
Pair Corralation between Grand Ocean and Aker Technology
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the Aker Technology. But the stock apears to be less risky and, when comparing its historical volatility, Grand Ocean Retail is 1.14 times less risky than Aker Technology. The stock trades about -0.46 of its potential returns per unit of risk. The Aker Technology Co is currently generating about -0.34 of returns per unit of risk over similar time horizon. If you would invest 2,555 in Aker Technology Co on October 16, 2024 and sell it today you would lose (465.00) from holding Aker Technology Co or give up 18.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. Aker Technology Co
Performance |
| Timeline |
| Grand Ocean Retail |
| Aker Technology |
Grand Ocean and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and Aker Technology
The main advantage of trading using opposite Grand Ocean and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, Aker Technology 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 Aker Technology will offset losses from the drop in Aker Technology's long position.| Grand Ocean vs. First Steamship Co | Grand Ocean vs. Far Eastern Department | Grand Ocean vs. LongDa Construction Development | Grand Ocean vs. Collins Co |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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