Correlation Between Atlantic Sapphire and Nordic Aqua
Can any of the company-specific risk be diversified away by investing in both Atlantic Sapphire and Nordic Aqua 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 Atlantic Sapphire and Nordic Aqua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic Sapphire As and Nordic Aqua Partners, you can compare the effects of market volatilities on Atlantic Sapphire and Nordic Aqua 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 Atlantic Sapphire with a short position of Nordic Aqua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Sapphire and Nordic Aqua.
Diversification Opportunities for Atlantic Sapphire and Nordic Aqua
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atlantic and Nordic is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Sapphire As and Nordic Aqua Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Aqua Partners and Atlantic Sapphire 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 Atlantic Sapphire As are associated (or correlated) with Nordic Aqua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Aqua Partners has no effect on the direction of Atlantic Sapphire i.e., Atlantic Sapphire and Nordic Aqua go up and down completely randomly.
Pair Corralation between Atlantic Sapphire and Nordic Aqua
Assuming the 90 days trading horizon Atlantic Sapphire As is expected to under-perform the Nordic Aqua. In addition to that, Atlantic Sapphire is 2.12 times more volatile than Nordic Aqua Partners. It trades about -0.12 of its total potential returns per unit of risk. Nordic Aqua Partners is currently generating about 0.33 per unit of volatility. If you would invest 7,300 in Nordic Aqua Partners on November 27, 2024 and sell it today you would earn a total of 1,600 from holding Nordic Aqua Partners or generate 21.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantic Sapphire As vs. Nordic Aqua Partners
Performance |
| Timeline |
| Atlantic Sapphire |
| Nordic Aqua Partners |
Atlantic Sapphire and Nordic Aqua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic Sapphire and Nordic Aqua
The main advantage of trading using opposite Atlantic Sapphire and Nordic Aqua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Sapphire position performs unexpectedly, Nordic Aqua 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 Nordic Aqua will offset losses from the drop in Nordic Aqua's long position.| Atlantic Sapphire vs. Grieg Seafood ASA | Atlantic Sapphire vs. Mowi ASA | Atlantic Sapphire vs. SalMar ASA | Atlantic Sapphire vs. Pf Bakkafrost |
| Nordic Aqua vs. Aasen Sparebank | Nordic Aqua vs. SpareBank 1 stlandet | Nordic Aqua vs. Nordic Mining ASA | Nordic Aqua vs. Pareto Bank 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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