Correlation Between Aker BP and Biofish Holding
Can any of the company-specific risk be diversified away by investing in both Aker BP and Biofish Holding 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 BP and Biofish Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker BP ASA and Biofish Holding AS, you can compare the effects of market volatilities on Aker BP and Biofish Holding 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 BP with a short position of Biofish Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker BP and Biofish Holding.
Diversification Opportunities for Aker BP and Biofish Holding
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aker and Biofish is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aker BP ASA and Biofish Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofish Holding AS and Aker BP 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 BP ASA are associated (or correlated) with Biofish Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofish Holding AS has no effect on the direction of Aker BP i.e., Aker BP and Biofish Holding go up and down completely randomly.
Pair Corralation between Aker BP and Biofish Holding
Assuming the 90 days trading horizon Aker BP ASA is expected to generate 0.63 times more return on investment than Biofish Holding. However, Aker BP ASA is 1.59 times less risky than Biofish Holding. It trades about 0.05 of its potential returns per unit of risk. Biofish Holding AS is currently generating about -0.06 per unit of risk. If you would invest 21,900 in Aker BP ASA on September 13, 2024 and sell it today you would earn a total of 420.00 from holding Aker BP ASA or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker BP ASA vs. Biofish Holding AS
Performance |
| Timeline |
| Aker BP ASA |
| Biofish Holding AS |
Aker BP and Biofish Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker BP and Biofish Holding
The main advantage of trading using opposite Aker BP and Biofish Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker BP position performs unexpectedly, Biofish Holding 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 Biofish Holding will offset losses from the drop in Biofish Holding's long position.The idea behind Aker BP ASA and Biofish Holding AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Biofish Holding vs. Hynion AS | Biofish Holding vs. Icelandic Salmon As | Biofish Holding vs. Ensurge Micropower ASA | Biofish Holding vs. Gigante Salmon AS |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |