Correlation Between Cavendish Hydrogen and Aurskog Sparebank
Can any of the company-specific risk be diversified away by investing in both Cavendish Hydrogen and Aurskog 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 Cavendish Hydrogen and Aurskog Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cavendish Hydrogen ASA and Aurskog Sparebank, you can compare the effects of market volatilities on Cavendish Hydrogen and Aurskog 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 Cavendish Hydrogen with a short position of Aurskog Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cavendish Hydrogen and Aurskog Sparebank.
Diversification Opportunities for Cavendish Hydrogen and Aurskog Sparebank
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cavendish and Aurskog is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cavendish Hydrogen ASA and Aurskog Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurskog Sparebank and Cavendish Hydrogen 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 Cavendish Hydrogen ASA are associated (or correlated) with Aurskog Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurskog Sparebank has no effect on the direction of Cavendish Hydrogen i.e., Cavendish Hydrogen and Aurskog Sparebank go up and down completely randomly.
Pair Corralation between Cavendish Hydrogen and Aurskog Sparebank
Assuming the 90 days trading horizon Cavendish Hydrogen ASA is expected to under-perform the Aurskog Sparebank. In addition to that, Cavendish Hydrogen is 3.8 times more volatile than Aurskog Sparebank. It trades about -0.2 of its total potential returns per unit of risk. Aurskog Sparebank is currently generating about -0.03 per unit of volatility. If you would invest 23,500 in Aurskog Sparebank on September 1, 2024 and sell it today you would lose (200.00) from holding Aurskog Sparebank or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cavendish Hydrogen ASA vs. Aurskog Sparebank
Performance |
| Timeline |
| Cavendish Hydrogen ASA |
| Aurskog Sparebank |
Cavendish Hydrogen and Aurskog Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cavendish Hydrogen and Aurskog Sparebank
The main advantage of trading using opposite Cavendish Hydrogen and Aurskog Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cavendish Hydrogen position performs unexpectedly, Aurskog 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 Aurskog Sparebank will offset losses from the drop in Aurskog Sparebank's long position.| Cavendish Hydrogen vs. Aurskog Sparebank | Cavendish Hydrogen vs. Jaeren Sparebank | Cavendish Hydrogen vs. Techstep ASA | Cavendish Hydrogen vs. Nordic Semiconductor ASA |
| Aurskog Sparebank vs. Melhus Sparebank | Aurskog Sparebank vs. Holand og Setskog | Aurskog Sparebank vs. Helgeland Sparebank |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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