Correlation Between Atlantic Sapphire and Vow ASA
Can any of the company-specific risk be diversified away by investing in both Atlantic Sapphire and Vow 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 Atlantic Sapphire and Vow ASA 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 Vow ASA, you can compare the effects of market volatilities on Atlantic Sapphire and Vow 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 Atlantic Sapphire with a short position of Vow ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Sapphire and Vow ASA.
Diversification Opportunities for Atlantic Sapphire and Vow ASA
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlantic and Vow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Sapphire As and Vow ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow ASA 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 Vow ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow ASA has no effect on the direction of Atlantic Sapphire i.e., Atlantic Sapphire and Vow ASA go up and down completely randomly.
Pair Corralation between Atlantic Sapphire and Vow ASA
Assuming the 90 days trading horizon Atlantic Sapphire As is expected to generate 0.29 times more return on investment than Vow ASA. However, Atlantic Sapphire As is 3.4 times less risky than Vow ASA. It trades about -0.35 of its potential returns per unit of risk. Vow ASA is currently generating about -0.16 per unit of risk. If you would invest 9.19 in Atlantic Sapphire As on August 25, 2024 and sell it today you would lose (1.60) from holding Atlantic Sapphire As or give up 17.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Atlantic Sapphire As vs. Vow ASA
Performance |
| Timeline |
| Atlantic Sapphire |
| Vow ASA |
Atlantic Sapphire and Vow ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic Sapphire and Vow ASA
The main advantage of trading using opposite Atlantic Sapphire and Vow ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Sapphire position performs unexpectedly, Vow 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 Vow ASA will offset losses from the drop in Vow ASA's long position.| Atlantic Sapphire vs. Grieg Seafood ASA | Atlantic Sapphire vs. Mowi ASA | Atlantic Sapphire vs. SalMar ASA | Atlantic Sapphire vs. Pf Bakkafrost |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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