Correlation Between Arendals Fossekompani and Archer
Can any of the company-specific risk be diversified away by investing in both Arendals Fossekompani and Archer 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 Arendals Fossekompani and Archer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arendals Fossekompani ASA and Archer Limited, you can compare the effects of market volatilities on Arendals Fossekompani and Archer 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 Arendals Fossekompani with a short position of Archer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arendals Fossekompani and Archer.
Diversification Opportunities for Arendals Fossekompani and Archer
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arendals and Archer is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Arendals Fossekompani ASA and Archer Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Limited and Arendals Fossekompani 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 Arendals Fossekompani ASA are associated (or correlated) with Archer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Limited has no effect on the direction of Arendals Fossekompani i.e., Arendals Fossekompani and Archer go up and down completely randomly.
Pair Corralation between Arendals Fossekompani and Archer
Assuming the 90 days trading horizon Arendals Fossekompani ASA is expected to under-perform the Archer. But the stock apears to be less risky and, when comparing its historical volatility, Arendals Fossekompani ASA is 2.23 times less risky than Archer. The stock trades about -0.2 of its potential returns per unit of risk. The Archer Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,750 in Archer Limited on November 3, 2024 and sell it today you would earn a total of 51.00 from holding Archer Limited or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arendals Fossekompani ASA vs. Archer Limited
Performance |
| Timeline |
| Arendals Fossekompani ASA |
| Archer Limited |
Arendals Fossekompani and Archer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arendals Fossekompani and Archer
The main advantage of trading using opposite Arendals Fossekompani and Archer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arendals Fossekompani position performs unexpectedly, Archer 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 Archer will offset losses from the drop in Archer's long position.| Arendals Fossekompani vs. AF Gruppen ASA | Arendals Fossekompani vs. Aker ASA | Arendals Fossekompani vs. Kitron ASA | Arendals Fossekompani vs. Kongsberg Gruppen ASA |
| Archer vs. Golden Energy Offshore | Archer vs. Jaeren Sparebank | Archer vs. Nidaros Sparebank | Archer vs. Dolphin Drilling AS |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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