Correlation Between Pf Bakkafrost and Aker Carbon
Can any of the company-specific risk be diversified away by investing in both Pf Bakkafrost and Aker Carbon 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 Pf Bakkafrost and Aker Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pf Bakkafrost and Aker Carbon Capture, you can compare the effects of market volatilities on Pf Bakkafrost and Aker Carbon 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 Pf Bakkafrost with a short position of Aker Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pf Bakkafrost and Aker Carbon.
Diversification Opportunities for Pf Bakkafrost and Aker Carbon
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BAKKA and Aker is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pf Bakkafrost and Aker Carbon Capture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Carbon Capture and Pf Bakkafrost 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 Pf Bakkafrost are associated (or correlated) with Aker Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Carbon Capture has no effect on the direction of Pf Bakkafrost i.e., Pf Bakkafrost and Aker Carbon go up and down completely randomly.
Pair Corralation between Pf Bakkafrost and Aker Carbon
Assuming the 90 days trading horizon Pf Bakkafrost is expected to generate 0.76 times more return on investment than Aker Carbon. However, Pf Bakkafrost is 1.32 times less risky than Aker Carbon. It trades about -0.03 of its potential returns per unit of risk. Aker Carbon Capture is currently generating about -0.04 per unit of risk. If you would invest 66,050 in Pf Bakkafrost on September 1, 2024 and sell it today you would lose (800.00) from holding Pf Bakkafrost or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pf Bakkafrost vs. Aker Carbon Capture
Performance |
| Timeline |
| Pf Bakkafrost |
| Aker Carbon Capture |
Pf Bakkafrost and Aker Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pf Bakkafrost and Aker Carbon
The main advantage of trading using opposite Pf Bakkafrost and Aker Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pf Bakkafrost position performs unexpectedly, Aker Carbon 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 Aker Carbon will offset losses from the drop in Aker Carbon's long position.The idea behind Pf Bakkafrost and Aker Carbon Capture pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |