Correlation Between AF Gruppen and Norske Skog
Can any of the company-specific risk be diversified away by investing in both AF Gruppen and Norske Skog 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 Norske Skog 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 Norske Skog Asa, you can compare the effects of market volatilities on AF Gruppen and Norske Skog 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 Norske Skog. Check out your portfolio center. Please also check ongoing floating volatility patterns of AF Gruppen and Norske Skog.
Diversification Opportunities for AF Gruppen and Norske Skog
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AFG and Norske is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AF Gruppen ASA and Norske Skog Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norske Skog 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 Norske Skog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norske Skog Asa has no effect on the direction of AF Gruppen i.e., AF Gruppen and Norske Skog go up and down completely randomly.
Pair Corralation between AF Gruppen and Norske Skog
Assuming the 90 days trading horizon AF Gruppen ASA is expected to generate 0.22 times more return on investment than Norske Skog. However, AF Gruppen ASA is 4.63 times less risky than Norske Skog. It trades about 0.26 of its potential returns per unit of risk. Norske Skog Asa is currently generating about -0.04 per unit of risk. If you would invest 13,140 in AF Gruppen ASA on September 1, 2024 and sell it today you would earn a total of 820.00 from holding AF Gruppen ASA or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AF Gruppen ASA vs. Norske Skog Asa
Performance |
| Timeline |
| AF Gruppen ASA |
| Norske Skog Asa |
AF Gruppen and Norske Skog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AF Gruppen and Norske Skog
The main advantage of trading using opposite AF Gruppen and Norske Skog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AF Gruppen position performs unexpectedly, Norske Skog 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 Norske Skog will offset losses from the drop in Norske Skog'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 |
| Norske Skog vs. Hoegh Autoliners ASA | Norske Skog vs. Reach Subsea | Norske Skog vs. Elkem ASA | Norske Skog vs. Integrated Wind Solutions |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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