Correlation Between Aker Solutions and Pyrum Innovations
Can any of the company-specific risk be diversified away by investing in both Aker Solutions and Pyrum Innovations 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 Pyrum Innovations 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 Pyrum Innovations AG, you can compare the effects of market volatilities on Aker Solutions and Pyrum Innovations 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 Pyrum Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Solutions and Pyrum Innovations.
Diversification Opportunities for Aker Solutions and Pyrum Innovations
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aker and Pyrum is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aker Solutions ASA and Pyrum Innovations AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyrum Innovations 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 Pyrum Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyrum Innovations has no effect on the direction of Aker Solutions i.e., Aker Solutions and Pyrum Innovations go up and down completely randomly.
Pair Corralation between Aker Solutions and Pyrum Innovations
Assuming the 90 days trading horizon Aker Solutions ASA is expected to generate 1.02 times more return on investment than Pyrum Innovations. However, Aker Solutions is 1.02 times more volatile than Pyrum Innovations AG. It trades about 0.07 of its potential returns per unit of risk. Pyrum Innovations AG is currently generating about -0.03 per unit of risk. If you would invest 3,044 in Aker Solutions ASA on September 1, 2024 and sell it today you would earn a total of 102.00 from holding Aker Solutions ASA or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aker Solutions ASA vs. Pyrum Innovations AG
Performance |
| Timeline |
| Aker Solutions ASA |
| Pyrum Innovations |
Aker Solutions and Pyrum Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Solutions and Pyrum Innovations
The main advantage of trading using opposite Aker Solutions and Pyrum Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Solutions position performs unexpectedly, Pyrum Innovations 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 Pyrum Innovations will offset losses from the drop in Pyrum Innovations' long position.| Aker Solutions vs. Aker ASA | Aker Solutions vs. Subsea 7 SA | Aker Solutions vs. TGS NOPEC Geophysical | Aker Solutions vs. BW Offshore |
| Pyrum Innovations vs. Aker Horizons AS | Pyrum Innovations vs. Aker Solutions ASA | Pyrum Innovations vs. REC Silicon ASA | Pyrum Innovations vs. Elkem ASA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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