Correlation Between Carasent ASA and Volue AS
Can any of the company-specific risk be diversified away by investing in both Carasent ASA and Volue 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 Carasent ASA and Volue AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carasent ASA and Volue AS, you can compare the effects of market volatilities on Carasent ASA and Volue 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 Carasent ASA with a short position of Volue AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carasent ASA and Volue AS.
Diversification Opportunities for Carasent ASA and Volue AS
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carasent and Volue is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Carasent ASA and Volue AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volue AS 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 Volue AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volue AS has no effect on the direction of Carasent ASA i.e., Carasent ASA and Volue AS go up and down completely randomly.
Pair Corralation between Carasent ASA and Volue AS
Assuming the 90 days trading horizon Carasent ASA is expected to generate 0.99 times more return on investment than Volue AS. However, Carasent ASA is 1.01 times less risky than Volue AS. It trades about 0.1 of its potential returns per unit of risk. Volue AS is currently generating about 0.08 per unit of risk. If you would invest 1,110 in Carasent ASA on September 4, 2024 and sell it today you would earn a total of 885.00 from holding Carasent ASA or generate 79.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.88% |
| Values | Daily Returns |
Carasent ASA vs. Volue AS
Performance |
| Timeline |
| Carasent ASA |
| Volue AS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Carasent ASA and Volue AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carasent ASA and Volue AS
The main advantage of trading using opposite Carasent ASA and Volue AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carasent ASA position performs unexpectedly, Volue 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 Volue AS will offset losses from the drop in Volue AS'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 |
| Volue AS vs. Arendals Fossekompani ASA | Volue AS vs. Kitron ASA | Volue AS vs. Aker Horizons AS | Volue AS vs. Cloudberry Clean Energy |
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 Stocks Directory module to find actively traded stocks across global markets.
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