Correlation Between 5Th Planet and Aega ASA
Can any of the company-specific risk be diversified away by investing in both 5Th Planet and Aega 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 5Th Planet and Aega ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 5Th Planet Games and Aega ASA, you can compare the effects of market volatilities on 5Th Planet and Aega 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 5Th Planet with a short position of Aega ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5Th Planet and Aega ASA.
Diversification Opportunities for 5Th Planet and Aega ASA
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 5Th and Aega is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding 5Th Planet Games and Aega ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aega ASA and 5Th Planet 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 5Th Planet Games are associated (or correlated) with Aega ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aega ASA has no effect on the direction of 5Th Planet i.e., 5Th Planet and Aega ASA go up and down completely randomly.
Pair Corralation between 5Th Planet and Aega ASA
Assuming the 90 days trading horizon 5Th Planet Games is expected to under-perform the Aega ASA. But the stock apears to be less risky and, when comparing its historical volatility, 5Th Planet Games is 4.87 times less risky than Aega ASA. The stock trades about -0.03 of its potential returns per unit of risk. The Aega ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 299.00 in Aega ASA on September 3, 2024 and sell it today you would lose (278.00) from holding Aega ASA or give up 92.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
5Th Planet Games vs. Aega ASA
Performance |
| Timeline |
| 5Th Planet Games |
| Aega ASA |
5Th Planet and Aega ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 5Th Planet and Aega ASA
The main advantage of trading using opposite 5Th Planet and Aega ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5Th Planet position performs unexpectedly, Aega 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 Aega ASA will offset losses from the drop in Aega ASA's long position.| 5Th Planet vs. Solstad Offsho | 5Th Planet vs. Saga Pure ASA | 5Th Planet vs. REC Silicon ASA | 5Th Planet vs. Kongsberg Automotive Holding |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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