Correlation Between Aker Horizons and Norwegian Block
Can any of the company-specific risk be diversified away by investing in both Aker Horizons and Norwegian Block 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 Horizons and Norwegian Block into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Horizons AS and Norwegian Block Exchange, you can compare the effects of market volatilities on Aker Horizons and Norwegian Block 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 Horizons with a short position of Norwegian Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Horizons and Norwegian Block.
Diversification Opportunities for Aker Horizons and Norwegian Block
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aker and Norwegian is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aker Horizons AS and Norwegian Block Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwegian Block Exchange and Aker Horizons 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 Horizons AS are associated (or correlated) with Norwegian Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwegian Block Exchange has no effect on the direction of Aker Horizons i.e., Aker Horizons and Norwegian Block go up and down completely randomly.
Pair Corralation between Aker Horizons and Norwegian Block
Assuming the 90 days trading horizon Aker Horizons AS is expected to under-perform the Norwegian Block. But the stock apears to be less risky and, when comparing its historical volatility, Aker Horizons AS is 2.48 times less risky than Norwegian Block. The stock trades about -0.21 of its potential returns per unit of risk. The Norwegian Block Exchange is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 51.00 in Norwegian Block Exchange on September 1, 2024 and sell it today you would lose (18.00) from holding Norwegian Block Exchange or give up 35.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aker Horizons AS vs. Norwegian Block Exchange
Performance |
| Timeline |
| Aker Horizons AS |
| Norwegian Block Exchange |
Aker Horizons and Norwegian Block Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Horizons and Norwegian Block
The main advantage of trading using opposite Aker Horizons and Norwegian Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Horizons position performs unexpectedly, Norwegian Block 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 Norwegian Block will offset losses from the drop in Norwegian Block's long position.| Aker Horizons vs. Aker Carbon Capture | Aker Horizons vs. REC Silicon ASA | Aker Horizons vs. Aker Solutions ASA | Aker Horizons vs. Aker BP ASA |
| Norwegian Block vs. Bergen Carbon Solutions | Norwegian Block vs. Aker Horizons AS | Norwegian Block vs. North Energy ASA | Norwegian Block vs. Sparebanken Sor |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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