Correlation Between Aker ASA and EAM Solar
Can any of the company-specific risk be diversified away by investing in both Aker ASA and EAM Solar 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 EAM Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker ASA and EAM Solar ASA, you can compare the effects of market volatilities on Aker ASA and EAM Solar 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 EAM Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker ASA and EAM Solar.
Diversification Opportunities for Aker ASA and EAM Solar
Very weak diversification
The 3 months correlation between Aker and EAM is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aker ASA and EAM Solar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAM Solar 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 EAM Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAM Solar ASA has no effect on the direction of Aker ASA i.e., Aker ASA and EAM Solar go up and down completely randomly.
Pair Corralation between Aker ASA and EAM Solar
Assuming the 90 days trading horizon Aker ASA is expected to generate 44.4 times less return on investment than EAM Solar. But when comparing it to its historical volatility, Aker ASA is 25.26 times less risky than EAM Solar. It trades about 0.19 of its potential returns per unit of risk. EAM Solar ASA is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 7.78 in EAM Solar ASA on November 28, 2024 and sell it today you would earn a total of 42.22 from holding EAM Solar ASA or generate 542.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aker ASA vs. EAM Solar ASA
Performance |
| Timeline |
| Aker ASA |
| EAM Solar ASA |
Aker ASA and EAM Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker ASA and EAM Solar
The main advantage of trading using opposite Aker ASA and EAM Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker ASA position performs unexpectedly, EAM Solar 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 EAM Solar will offset losses from the drop in EAM Solar's long position.| Aker ASA vs. Storebrand ASA | Aker ASA vs. Aker Solutions ASA | Aker ASA vs. DnB ASA | Aker ASA vs. Orkla ASA |
| EAM Solar vs. Nordhealth AS | EAM Solar vs. Awilco Drilling PLC | EAM Solar vs. Golden Energy Offshore | EAM Solar vs. Sparebank 1 SMN |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |