Correlation Between Aasen Sparebank and Cool Company
Can any of the company-specific risk be diversified away by investing in both Aasen Sparebank and Cool Company 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 Aasen Sparebank and Cool Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aasen Sparebank and Cool Company Oy, you can compare the effects of market volatilities on Aasen Sparebank and Cool Company 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 Aasen Sparebank with a short position of Cool Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aasen Sparebank and Cool Company.
Diversification Opportunities for Aasen Sparebank and Cool Company
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aasen and Cool is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aasen Sparebank and Cool Company Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company Oy and Aasen 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 Aasen Sparebank are associated (or correlated) with Cool Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company Oy has no effect on the direction of Aasen Sparebank i.e., Aasen Sparebank and Cool Company go up and down completely randomly.
Pair Corralation between Aasen Sparebank and Cool Company
Assuming the 90 days trading horizon Aasen Sparebank is expected to generate 0.42 times more return on investment than Cool Company. However, Aasen Sparebank is 2.41 times less risky than Cool Company. It trades about 0.03 of its potential returns per unit of risk. Cool Company Oy is currently generating about -0.16 per unit of risk. If you would invest 11,790 in Aasen Sparebank on August 31, 2024 and sell it today you would earn a total of 110.00 from holding Aasen Sparebank or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aasen Sparebank vs. Cool Company Oy
Performance |
| Timeline |
| Aasen Sparebank |
| Cool Company Oy |
Aasen Sparebank and Cool Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aasen Sparebank and Cool Company
The main advantage of trading using opposite Aasen Sparebank and Cool Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aasen Sparebank position performs unexpectedly, Cool Company 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 Cool Company will offset losses from the drop in Cool Company's long position.| Aasen Sparebank vs. Sparebank 1 SMN | Aasen Sparebank vs. Sparebank 1 Nord Norge | Aasen Sparebank vs. Sparebanken Vest | Aasen Sparebank vs. Sparebank 1 Ostfold |
| Cool Company vs. Aasen Sparebank | Cool Company vs. Morrow Bank ASA | Cool Company vs. BW Offshore | Cool Company vs. Sunndal Sparebank |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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