Correlation Between Advanced Emissions and Aker Carbon
Can any of the company-specific risk be diversified away by investing in both Advanced Emissions and Aker Carbon 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 Advanced Emissions and Aker Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Emissions Solutions and Aker Carbon Capture, you can compare the effects of market volatilities on Advanced Emissions and Aker Carbon 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 Advanced Emissions with a short position of Aker Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Emissions and Aker Carbon.
Diversification Opportunities for Advanced Emissions and Aker Carbon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Aker is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Emissions Solutions and Aker Carbon Capture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Carbon Capture and Advanced Emissions 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 Advanced Emissions Solutions are associated (or correlated) with Aker Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Carbon Capture has no effect on the direction of Advanced Emissions i.e., Advanced Emissions and Aker Carbon go up and down completely randomly.
Pair Corralation between Advanced Emissions and Aker Carbon
Given the investment horizon of 90 days Advanced Emissions Solutions is expected to generate 1.21 times more return on investment than Aker Carbon. However, Advanced Emissions is 1.21 times more volatile than Aker Carbon Capture. It trades about 0.03 of its potential returns per unit of risk. Aker Carbon Capture is currently generating about 0.0 per unit of risk. If you would invest 262.00 in Advanced Emissions Solutions on August 27, 2024 and sell it today you would lose (2.00) from holding Advanced Emissions Solutions or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.79% |
| Values | Daily Returns |
Advanced Emissions Solutions vs. Aker Carbon Capture
Performance |
| Timeline |
| Advanced Emissions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aker Carbon Capture |
Advanced Emissions and Aker Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Emissions and Aker Carbon
The main advantage of trading using opposite Advanced Emissions and Aker Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Emissions position performs unexpectedly, Aker Carbon 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 Aker Carbon will offset losses from the drop in Aker Carbon's long position.| Advanced Emissions vs. Vow ASA | Advanced Emissions vs. Seychelle Environmtl | Advanced Emissions vs. Eestech | Advanced Emissions vs. Energy and Water |
| Aker Carbon vs. TOMI Environmental Solutions | Aker Carbon vs. Zurn Elkay Water | Aker Carbon vs. Federal Signal | Aker Carbon vs. Energy Recovery |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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