Correlation Between Akastor ASA and Subsea 7
Can any of the company-specific risk be diversified away by investing in both Akastor ASA and Subsea 7 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 Akastor ASA and Subsea 7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akastor ASA and Subsea 7 SA, you can compare the effects of market volatilities on Akastor ASA and Subsea 7 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 Akastor ASA with a short position of Subsea 7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akastor ASA and Subsea 7.
Diversification Opportunities for Akastor ASA and Subsea 7
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Akastor and Subsea is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Akastor ASA and Subsea 7 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Subsea 7 SA and Akastor 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 Akastor ASA are associated (or correlated) with Subsea 7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Subsea 7 SA has no effect on the direction of Akastor ASA i.e., Akastor ASA and Subsea 7 go up and down completely randomly.
Pair Corralation between Akastor ASA and Subsea 7
Assuming the 90 days trading horizon Akastor ASA is expected to under-perform the Subsea 7. In addition to that, Akastor ASA is 1.27 times more volatile than Subsea 7 SA. It trades about -0.02 of its total potential returns per unit of risk. Subsea 7 SA is currently generating about 0.1 per unit of volatility. If you would invest 16,830 in Subsea 7 SA on September 1, 2024 and sell it today you would earn a total of 600.00 from holding Subsea 7 SA or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akastor ASA vs. Subsea 7 SA
Performance |
| Timeline |
| Akastor ASA |
| Subsea 7 SA |
Akastor ASA and Subsea 7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akastor ASA and Subsea 7
The main advantage of trading using opposite Akastor ASA and Subsea 7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akastor ASA position performs unexpectedly, Subsea 7 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 Subsea 7 will offset losses from the drop in Subsea 7's long position.| Akastor ASA vs. Aker Solutions ASA | Akastor ASA vs. Aker BP ASA | Akastor ASA vs. Odfjell Drilling | Akastor ASA vs. Eidesvik Offshore ASA |
| Subsea 7 vs. TGS NOPEC Geophysical | Subsea 7 vs. Aker Solutions ASA | Subsea 7 vs. Storebrand ASA | Subsea 7 vs. Dno 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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