Correlation Between Aker ASA and Atea ASA
Can any of the company-specific risk be diversified away by investing in both Aker ASA and Atea ASA 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 Aker ASA and Atea ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker ASA and Atea ASA, you can compare the effects of market volatilities on Aker ASA and Atea ASA 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 Aker ASA with a short position of Atea ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker ASA and Atea ASA.
Diversification Opportunities for Aker ASA and Atea ASA
Good diversification
The 3 months correlation between Aker and Atea is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aker ASA and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA and Aker 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 Aker ASA are associated (or correlated) with Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of Aker ASA i.e., Aker ASA and Atea ASA go up and down completely randomly.
Pair Corralation between Aker ASA and Atea ASA
Assuming the 90 days trading horizon Aker ASA is expected to generate 0.96 times more return on investment than Atea ASA. However, Aker ASA is 1.04 times less risky than Atea ASA. It trades about 0.18 of its potential returns per unit of risk. Atea ASA is currently generating about -0.07 per unit of risk. If you would invest 54,040 in Aker ASA on August 31, 2024 and sell it today you would earn a total of 3,160 from holding Aker ASA or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker ASA vs. Atea ASA
Performance |
| Timeline |
| Aker ASA |
| Atea ASA |
Aker ASA and Atea ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker ASA and Atea ASA
The main advantage of trading using opposite Aker ASA and Atea ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker ASA position performs unexpectedly, Atea ASA 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 Atea ASA will offset losses from the drop in Atea ASA's long position.| Aker ASA vs. DnB ASA | Aker ASA vs. Gjensidige Forsikring ASA | Aker ASA vs. Orkla ASA | Aker ASA vs. Telenor ASA |
| Atea ASA vs. Gjensidige Forsikring ASA | Atea ASA vs. Veidekke ASA | Atea ASA vs. Orkla ASA | Atea ASA vs. Aker 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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