Correlation Between Airthings ASA and Arctic Bioscience
Can any of the company-specific risk be diversified away by investing in both Airthings ASA and Arctic Bioscience 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 Airthings ASA and Arctic Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airthings ASA and Arctic Bioscience AS, you can compare the effects of market volatilities on Airthings ASA and Arctic Bioscience 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 Airthings ASA with a short position of Arctic Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airthings ASA and Arctic Bioscience.
Diversification Opportunities for Airthings ASA and Arctic Bioscience
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airthings and Arctic is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Airthings ASA and Arctic Bioscience AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Bioscience and Airthings 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 Airthings ASA are associated (or correlated) with Arctic Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Bioscience has no effect on the direction of Airthings ASA i.e., Airthings ASA and Arctic Bioscience go up and down completely randomly.
Pair Corralation between Airthings ASA and Arctic Bioscience
Assuming the 90 days trading horizon Airthings ASA is expected to generate 0.36 times more return on investment than Arctic Bioscience. However, Airthings ASA is 2.82 times less risky than Arctic Bioscience. It trades about -0.03 of its potential returns per unit of risk. Arctic Bioscience AS is currently generating about -0.02 per unit of risk. If you would invest 318.00 in Airthings ASA on September 3, 2024 and sell it today you would lose (82.00) from holding Airthings ASA or give up 25.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airthings ASA vs. Arctic Bioscience AS
Performance |
| Timeline |
| Airthings ASA |
| Arctic Bioscience |
Airthings ASA and Arctic Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airthings ASA and Arctic Bioscience
The main advantage of trading using opposite Airthings ASA and Arctic Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airthings ASA position performs unexpectedly, Arctic Bioscience 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 Arctic Bioscience will offset losses from the drop in Arctic Bioscience's long position.| Airthings ASA vs. Atlantic Sapphire As | Airthings ASA vs. Vow ASA | Airthings ASA vs. Aker Horizons AS | Airthings ASA vs. Saga Pure ASA |
| Arctic Bioscience vs. Airthings ASA | Arctic Bioscience vs. Aega ASA | Arctic Bioscience vs. Huddly AS | Arctic Bioscience vs. Bergenbio 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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