Correlation Between Arctic Bioscience and Airthings ASA
Can any of the company-specific risk be diversified away by investing in both Arctic Bioscience and Airthings 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 Arctic Bioscience and Airthings ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Bioscience AS and Airthings ASA, you can compare the effects of market volatilities on Arctic Bioscience and Airthings 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 Arctic Bioscience with a short position of Airthings ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Bioscience and Airthings ASA.
Diversification Opportunities for Arctic Bioscience and Airthings ASA
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arctic and Airthings is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Bioscience AS and Airthings ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airthings ASA and Arctic Bioscience 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 Arctic Bioscience AS are associated (or correlated) with Airthings ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airthings ASA has no effect on the direction of Arctic Bioscience i.e., Arctic Bioscience and Airthings ASA go up and down completely randomly.
Pair Corralation between Arctic Bioscience and Airthings ASA
Assuming the 90 days trading horizon Arctic Bioscience AS is expected to under-perform the Airthings ASA. In addition to that, Arctic Bioscience is 2.81 times more volatile than Airthings ASA. It trades about -0.02 of its total potential returns per unit of risk. Airthings ASA is currently generating about -0.03 per unit of volatility. If you would invest 318.00 in Airthings ASA on September 4, 2024 and sell it today you would lose (90.00) from holding Airthings ASA or give up 28.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Bioscience AS vs. Airthings ASA
Performance |
| Timeline |
| Arctic Bioscience |
| Airthings ASA |
Arctic Bioscience and Airthings ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Bioscience and Airthings ASA
The main advantage of trading using opposite Arctic Bioscience and Airthings ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Bioscience position performs unexpectedly, Airthings 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 Airthings ASA will offset losses from the drop in Airthings ASA's long position.| Arctic Bioscience vs. Airthings ASA | Arctic Bioscience vs. Aega ASA | Arctic Bioscience vs. Huddly AS | Arctic Bioscience vs. Bergenbio ASA |
| Airthings ASA vs. Atlantic Sapphire As | Airthings ASA vs. Vow ASA | Airthings ASA vs. Aker Horizons AS | Airthings ASA vs. Saga Pure ASA |
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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