Correlation Between Aker Carbon and American Shipping
Can any of the company-specific risk be diversified away by investing in both Aker Carbon and American Shipping 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 Aker Carbon and American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Carbon Capture and American Shipping, you can compare the effects of market volatilities on Aker Carbon and American Shipping 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 Aker Carbon with a short position of American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Carbon and American Shipping.
Diversification Opportunities for Aker Carbon and American Shipping
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aker and American is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aker Carbon Capture and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping and Aker Carbon 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 Aker Carbon Capture are associated (or correlated) with American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Aker Carbon i.e., Aker Carbon and American Shipping go up and down completely randomly.
Pair Corralation between Aker Carbon and American Shipping
Assuming the 90 days trading horizon Aker Carbon Capture is expected to under-perform the American Shipping. In addition to that, Aker Carbon is 1.2 times more volatile than American Shipping. It trades about -0.04 of its total potential returns per unit of risk. American Shipping is currently generating about -0.03 per unit of volatility. If you would invest 2,803 in American Shipping on September 1, 2024 and sell it today you would lose (38.00) from holding American Shipping or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Carbon Capture vs. American Shipping
Performance |
| Timeline |
| Aker Carbon Capture |
| American Shipping |
Aker Carbon and American Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Carbon and American Shipping
The main advantage of trading using opposite Aker Carbon and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Carbon position performs unexpectedly, American Shipping 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 American Shipping will offset losses from the drop in American Shipping's long position.The idea behind Aker Carbon Capture and American Shipping pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| American Shipping vs. Aker Horizons AS | American Shipping vs. REC Silicon ASA | American Shipping vs. Kongsberg Automotive Holding | American Shipping vs. Aker Carbon Capture |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |