Correlation Between AF Gruppen and Europris ASA
Can any of the company-specific risk be diversified away by investing in both AF Gruppen and Europris 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 AF Gruppen and Europris ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AF Gruppen ASA and Europris ASA, you can compare the effects of market volatilities on AF Gruppen and Europris 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 AF Gruppen with a short position of Europris ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AF Gruppen and Europris ASA.
Diversification Opportunities for AF Gruppen and Europris ASA
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AFG and Europris is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding AF Gruppen ASA and Europris ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europris ASA and AF Gruppen 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 AF Gruppen ASA are associated (or correlated) with Europris ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europris ASA has no effect on the direction of AF Gruppen i.e., AF Gruppen and Europris ASA go up and down completely randomly.
Pair Corralation between AF Gruppen and Europris ASA
Assuming the 90 days trading horizon AF Gruppen is expected to generate 1.36 times less return on investment than Europris ASA. In addition to that, AF Gruppen is 1.04 times more volatile than Europris ASA. It trades about 0.02 of its total potential returns per unit of risk. Europris ASA is currently generating about 0.03 per unit of volatility. If you would invest 5,828 in Europris ASA on August 29, 2024 and sell it today you would earn a total of 862.00 from holding Europris ASA or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AF Gruppen ASA vs. Europris ASA
Performance |
| Timeline |
| AF Gruppen ASA |
| Europris ASA |
AF Gruppen and Europris ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AF Gruppen and Europris ASA
The main advantage of trading using opposite AF Gruppen and Europris ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AF Gruppen position performs unexpectedly, Europris 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 Europris ASA will offset losses from the drop in Europris ASA's long position.| AF Gruppen vs. Veidekke ASA | AF Gruppen vs. Gjensidige Forsikring ASA | AF Gruppen vs. Orkla ASA | AF Gruppen vs. Kongsberg Gruppen ASA |
| Europris ASA vs. Storebrand ASA | Europris ASA vs. XXL ASA | Europris ASA vs. Orkla ASA | Europris ASA vs. DnB 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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