Correlation Between Aker Solutions and Akastor ASA
Can any of the company-specific risk be diversified away by investing in both Aker Solutions and Akastor 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 Solutions and Akastor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Solutions ASA and Akastor ASA, you can compare the effects of market volatilities on Aker Solutions and Akastor 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 Solutions with a short position of Akastor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Solutions and Akastor ASA.
Diversification Opportunities for Aker Solutions and Akastor ASA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aker and Akastor is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aker Solutions ASA and Akastor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akastor ASA and Aker Solutions 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 Solutions ASA are associated (or correlated) with Akastor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akastor ASA has no effect on the direction of Aker Solutions i.e., Aker Solutions and Akastor ASA go up and down completely randomly.
Pair Corralation between Aker Solutions and Akastor ASA
Assuming the 90 days trading horizon Aker Solutions ASA is expected to generate 0.7 times more return on investment than Akastor ASA. However, Aker Solutions ASA is 1.43 times less risky than Akastor ASA. It trades about 0.5 of its potential returns per unit of risk. Akastor ASA is currently generating about -0.05 per unit of risk. If you would invest 2,714 in Aker Solutions ASA on September 3, 2024 and sell it today you would earn a total of 432.00 from holding Aker Solutions ASA or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Solutions ASA vs. Akastor ASA
Performance |
| Timeline |
| Aker Solutions ASA |
| Akastor ASA |
Aker Solutions and Akastor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Solutions and Akastor ASA
The main advantage of trading using opposite Aker Solutions and Akastor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Solutions position performs unexpectedly, Akastor 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 Akastor ASA will offset losses from the drop in Akastor ASA's long position.| Aker Solutions vs. Subsea 7 SA | Aker Solutions vs. Aker ASA | Aker Solutions vs. Dno ASA | Aker Solutions vs. Aker Carbon Capture |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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