Correlation Between AF Gruppen and Goodtech
Can any of the company-specific risk be diversified away by investing in both AF Gruppen and Goodtech 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 Goodtech 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 Goodtech, you can compare the effects of market volatilities on AF Gruppen and Goodtech 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 Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AF Gruppen and Goodtech.
Diversification Opportunities for AF Gruppen and Goodtech
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AFG and Goodtech is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AF Gruppen ASA and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech 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 Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of AF Gruppen i.e., AF Gruppen and Goodtech go up and down completely randomly.
Pair Corralation between AF Gruppen and Goodtech
Assuming the 90 days trading horizon AF Gruppen ASA is expected to generate 0.79 times more return on investment than Goodtech. However, AF Gruppen ASA is 1.27 times less risky than Goodtech. It trades about 0.31 of its potential returns per unit of risk. Goodtech is currently generating about -0.23 per unit of risk. If you would invest 14,800 in AF Gruppen ASA on November 3, 2024 and sell it today you would earn a total of 1,240 from holding AF Gruppen ASA or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AF Gruppen ASA vs. Goodtech
Performance |
| Timeline |
| AF Gruppen ASA |
| Goodtech |
AF Gruppen and Goodtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AF Gruppen and Goodtech
The main advantage of trading using opposite AF Gruppen and Goodtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AF Gruppen position performs unexpectedly, Goodtech 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 Goodtech will offset losses from the drop in Goodtech'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 |
| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Borgestad A | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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