Correlation Between Aker Carbon and Dno ASA
Can any of the company-specific risk be diversified away by investing in both Aker Carbon and Dno 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 Aker Carbon and Dno ASA 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 Dno ASA, you can compare the effects of market volatilities on Aker Carbon and Dno 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 Aker Carbon with a short position of Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Carbon and Dno ASA.
Diversification Opportunities for Aker Carbon and Dno ASA
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aker and Dno is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aker Carbon Capture and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA 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 Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of Aker Carbon i.e., Aker Carbon and Dno ASA go up and down completely randomly.
Pair Corralation between Aker Carbon and Dno ASA
Assuming the 90 days trading horizon Aker Carbon is expected to generate 8.8 times less return on investment than Dno ASA. In addition to that, Aker Carbon is 1.49 times more volatile than Dno ASA. It trades about 0.06 of its total potential returns per unit of risk. Dno ASA is currently generating about 0.73 per unit of volatility. If you would invest 1,010 in Dno ASA on October 20, 2024 and sell it today you would earn a total of 251.00 from holding Dno ASA or generate 24.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Carbon Capture vs. Dno ASA
Performance |
| Timeline |
| Aker Carbon Capture |
| Dno ASA |
Aker Carbon and Dno ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Carbon and Dno ASA
The main advantage of trading using opposite Aker Carbon and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Carbon position performs unexpectedly, Dno 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 Dno ASA will offset losses from the drop in Dno ASA's long position.The idea behind Aker Carbon Capture and Dno ASA 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.| Dno ASA vs. Aker Solutions ASA | Dno ASA vs. Storebrand ASA | Dno ASA vs. Frontline | Dno ASA vs. Subsea 7 SA |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |