Correlation Between Carasent ASA and Bouvet
Can any of the company-specific risk be diversified away by investing in both Carasent ASA and Bouvet 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 Carasent ASA and Bouvet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carasent ASA and Bouvet, you can compare the effects of market volatilities on Carasent ASA and Bouvet 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 Carasent ASA with a short position of Bouvet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carasent ASA and Bouvet.
Diversification Opportunities for Carasent ASA and Bouvet
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carasent and Bouvet is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Carasent ASA and Bouvet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouvet and Carasent 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 Carasent ASA are associated (or correlated) with Bouvet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bouvet has no effect on the direction of Carasent ASA i.e., Carasent ASA and Bouvet go up and down completely randomly.
Pair Corralation between Carasent ASA and Bouvet
Assuming the 90 days trading horizon Carasent ASA is expected to generate 1.65 times more return on investment than Bouvet. However, Carasent ASA is 1.65 times more volatile than Bouvet. It trades about 0.05 of its potential returns per unit of risk. Bouvet is currently generating about 0.07 per unit of risk. If you would invest 1,830 in Carasent ASA on August 31, 2024 and sell it today you would earn a total of 230.00 from holding Carasent ASA or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carasent ASA vs. Bouvet
Performance |
| Timeline |
| Carasent ASA |
| Bouvet |
Carasent ASA and Bouvet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carasent ASA and Bouvet
The main advantage of trading using opposite Carasent ASA and Bouvet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carasent ASA position performs unexpectedly, Bouvet 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 Bouvet will offset losses from the drop in Bouvet's long position.| Carasent ASA vs. Arcticzymes Technologies ASA | Carasent ASA vs. Smart Eye AB | Carasent ASA vs. Bergenbio ASA | Carasent ASA vs. Kitron 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |