Correlation Between Arcticzymes Technologies and REC Silicon
Can any of the company-specific risk be diversified away by investing in both Arcticzymes Technologies and REC Silicon 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 Arcticzymes Technologies and REC Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcticzymes Technologies ASA and REC Silicon ASA, you can compare the effects of market volatilities on Arcticzymes Technologies and REC Silicon 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 Arcticzymes Technologies with a short position of REC Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcticzymes Technologies and REC Silicon.
Diversification Opportunities for Arcticzymes Technologies and REC Silicon
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arcticzymes and REC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and REC Silicon ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REC Silicon ASA and Arcticzymes Technologies 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 Arcticzymes Technologies ASA are associated (or correlated) with REC Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REC Silicon ASA has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and REC Silicon go up and down completely randomly.
Pair Corralation between Arcticzymes Technologies and REC Silicon
Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to under-perform the REC Silicon. But the stock apears to be less risky and, when comparing its historical volatility, Arcticzymes Technologies ASA is 1.96 times less risky than REC Silicon. The stock trades about -0.15 of its potential returns per unit of risk. The REC Silicon ASA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,143 in REC Silicon ASA on September 3, 2024 and sell it today you would lose (723.00) from holding REC Silicon ASA or give up 63.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcticzymes Technologies ASA vs. REC Silicon ASA
Performance |
| Timeline |
| Arcticzymes Technologies |
| REC Silicon ASA |
Arcticzymes Technologies and REC Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcticzymes Technologies and REC Silicon
The main advantage of trading using opposite Arcticzymes Technologies and REC Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcticzymes Technologies position performs unexpectedly, REC Silicon 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 REC Silicon will offset losses from the drop in REC Silicon's long position.| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron ASA |
| REC Silicon vs. Aker Horizons AS | REC Silicon vs. MPC Container Ships | REC Silicon vs. Aker Carbon Capture | REC Silicon vs. Nordic Semiconductor 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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