Correlation Between Aker Horizons and Vow ASA
Can any of the company-specific risk be diversified away by investing in both Aker Horizons and Vow 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 Horizons and Vow ASA 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 Vow ASA, you can compare the effects of market volatilities on Aker Horizons and Vow 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 Horizons with a short position of Vow ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Horizons and Vow ASA.
Diversification Opportunities for Aker Horizons and Vow ASA
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aker and Vow is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aker Horizons AS and Vow ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow ASA 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 Vow ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow ASA has no effect on the direction of Aker Horizons i.e., Aker Horizons and Vow ASA go up and down completely randomly.
Pair Corralation between Aker Horizons and Vow ASA
Assuming the 90 days trading horizon Aker Horizons AS is expected to under-perform the Vow ASA. But the stock apears to be less risky and, when comparing its historical volatility, Aker Horizons AS is 1.51 times less risky than Vow ASA. The stock trades about -0.34 of its potential returns per unit of risk. The Vow ASA is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 298.00 in Vow ASA on August 25, 2024 and sell it today you would lose (88.00) from holding Vow ASA or give up 29.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Horizons AS vs. Vow ASA
Performance |
| Timeline |
| Aker Horizons AS |
| Vow ASA |
Aker Horizons and Vow ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Horizons and Vow ASA
The main advantage of trading using opposite Aker Horizons and Vow ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Horizons position performs unexpectedly, Vow 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 Vow ASA will offset losses from the drop in Vow ASA'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 |
| Vow ASA vs. Hexagon Composites ASA | Vow ASA vs. Vow Green Metals | Vow ASA vs. REC Silicon ASA | Vow ASA vs. Aker Carbon Capture |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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