Correlation Between American Shipping and Kid ASA
Can any of the company-specific risk be diversified away by investing in both American Shipping and Kid 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 American Shipping and Kid ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shipping and Kid ASA, you can compare the effects of market volatilities on American Shipping and Kid 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 American Shipping with a short position of Kid ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shipping and Kid ASA.
Diversification Opportunities for American Shipping and Kid ASA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Kid is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding American Shipping and Kid ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kid ASA and American Shipping 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 American Shipping are associated (or correlated) with Kid ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kid ASA has no effect on the direction of American Shipping i.e., American Shipping and Kid ASA go up and down completely randomly.
Pair Corralation between American Shipping and Kid ASA
Assuming the 90 days trading horizon American Shipping is expected to generate 5.49 times less return on investment than Kid ASA. In addition to that, American Shipping is 1.45 times more volatile than Kid ASA. It trades about 0.01 of its total potential returns per unit of risk. Kid ASA is currently generating about 0.08 per unit of volatility. If you would invest 6,152 in Kid ASA on August 29, 2024 and sell it today you would earn a total of 6,108 from holding Kid ASA or generate 99.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Shipping vs. Kid ASA
Performance |
| Timeline |
| American Shipping |
| Kid ASA |
American Shipping and Kid ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shipping and Kid ASA
The main advantage of trading using opposite American Shipping and Kid ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shipping position performs unexpectedly, Kid 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 Kid ASA will offset losses from the drop in Kid ASA's long position.| American Shipping vs. Frontline | American Shipping vs. BW LPG | American Shipping vs. FLEX LNG | American Shipping vs. Dampskibsselskabet Norden AS |
| Kid ASA vs. Europris ASA | Kid ASA vs. Selvaag Bolig ASA | Kid ASA vs. Storebrand ASA | Kid ASA vs. Kitron 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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