Correlation Between Arcticzymes Technologies and Sogn Sparebank
Can any of the company-specific risk be diversified away by investing in both Arcticzymes Technologies and Sogn Sparebank 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 Sogn Sparebank 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 Sogn Sparebank, you can compare the effects of market volatilities on Arcticzymes Technologies and Sogn Sparebank 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 Sogn Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcticzymes Technologies and Sogn Sparebank.
Diversification Opportunities for Arcticzymes Technologies and Sogn Sparebank
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arcticzymes and Sogn is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and Sogn Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogn Sparebank 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 Sogn Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogn Sparebank has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and Sogn Sparebank go up and down completely randomly.
Pair Corralation between Arcticzymes Technologies and Sogn Sparebank
Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to under-perform the Sogn Sparebank. In addition to that, Arcticzymes Technologies is 2.05 times more volatile than Sogn Sparebank. It trades about -0.31 of its total potential returns per unit of risk. Sogn Sparebank is currently generating about 0.33 per unit of volatility. If you would invest 22,750 in Sogn Sparebank on September 1, 2024 and sell it today you would earn a total of 3,645 from holding Sogn Sparebank or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcticzymes Technologies ASA vs. Sogn Sparebank
Performance |
| Timeline |
| Arcticzymes Technologies |
| Sogn Sparebank |
Arcticzymes Technologies and Sogn Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcticzymes Technologies and Sogn Sparebank
The main advantage of trading using opposite Arcticzymes Technologies and Sogn Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcticzymes Technologies position performs unexpectedly, Sogn Sparebank 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 Sogn Sparebank will offset losses from the drop in Sogn Sparebank's long position.| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies vs. Kitron ASA |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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