Correlation Between Bewi Asa and Masoval AS
Can any of the company-specific risk be diversified away by investing in both Bewi Asa and Masoval AS 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 Bewi Asa and Masoval AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bewi Asa and Masoval AS, you can compare the effects of market volatilities on Bewi Asa and Masoval AS 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 Bewi Asa with a short position of Masoval AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bewi Asa and Masoval AS.
Diversification Opportunities for Bewi Asa and Masoval AS
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bewi and Masoval is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bewi Asa and Masoval AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masoval AS and Bewi Asa 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 Bewi Asa are associated (or correlated) with Masoval AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masoval AS has no effect on the direction of Bewi Asa i.e., Bewi Asa and Masoval AS go up and down completely randomly.
Pair Corralation between Bewi Asa and Masoval AS
Assuming the 90 days trading horizon Bewi Asa is expected to under-perform the Masoval AS. But the stock apears to be less risky and, when comparing its historical volatility, Bewi Asa is 1.1 times less risky than Masoval AS. The stock trades about -0.15 of its potential returns per unit of risk. The Masoval AS is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,780 in Masoval AS on January 16, 2025 and sell it today you would lose (340.00) from holding Masoval AS or give up 12.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bewi Asa vs. Masoval AS
Performance |
| Timeline |
| Bewi Asa |
| Masoval AS |
Bewi Asa and Masoval AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bewi Asa and Masoval AS
The main advantage of trading using opposite Bewi Asa and Masoval AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bewi Asa position performs unexpectedly, Masoval AS 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 Masoval AS will offset losses from the drop in Masoval AS's long position.| Bewi Asa vs. Kitron ASA | Bewi Asa vs. Norske Skog Asa | Bewi Asa vs. AF Gruppen ASA | Bewi Asa vs. Elkem ASA |
| Masoval AS vs. Icelandic Salmon As | Masoval AS vs. Ice Fish Farm | Masoval AS vs. Arctic Fish Holding | Masoval AS vs. Bewi 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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