Correlation Between Aega ASA and Nordic Unmanned
Can any of the company-specific risk be diversified away by investing in both Aega ASA and Nordic Unmanned 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 Aega ASA and Nordic Unmanned into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aega ASA and Nordic Unmanned As, you can compare the effects of market volatilities on Aega ASA and Nordic Unmanned 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 Aega ASA with a short position of Nordic Unmanned. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aega ASA and Nordic Unmanned.
Diversification Opportunities for Aega ASA and Nordic Unmanned
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aega and Nordic is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aega ASA and Nordic Unmanned As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Unmanned As and Aega ASA 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 Aega ASA are associated (or correlated) with Nordic Unmanned. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Unmanned As has no effect on the direction of Aega ASA i.e., Aega ASA and Nordic Unmanned go up and down completely randomly.
Pair Corralation between Aega ASA and Nordic Unmanned
Assuming the 90 days trading horizon Aega ASA is expected to generate 1.54 times more return on investment than Nordic Unmanned. However, Aega ASA is 1.54 times more volatile than Nordic Unmanned As. It trades about 0.01 of its potential returns per unit of risk. Nordic Unmanned As is currently generating about -0.06 per unit of risk. If you would invest 305.00 in Aega ASA on September 3, 2024 and sell it today you would lose (279.00) from holding Aega ASA or give up 91.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aega ASA vs. Nordic Unmanned As
Performance |
| Timeline |
| Aega ASA |
| Nordic Unmanned As |
Aega ASA and Nordic Unmanned Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aega ASA and Nordic Unmanned
The main advantage of trading using opposite Aega ASA and Nordic Unmanned positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aega ASA position performs unexpectedly, Nordic Unmanned 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 Nordic Unmanned will offset losses from the drop in Nordic Unmanned's long position.| Aega ASA vs. Instabank ASA | Aega ASA vs. Grong Sparebank | Aega ASA vs. SD Standard Drilling | Aega ASA vs. Bien Sparebank ASA |
| Nordic Unmanned vs. Kongsberg Gruppen ASA | Nordic Unmanned vs. Elkem ASA | Nordic Unmanned vs. Integrated Wind Solutions | Nordic Unmanned vs. Vow 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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