Correlation Between DnB ASA and Arctic Fish
Can any of the company-specific risk be diversified away by investing in both DnB ASA and Arctic Fish 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 DnB ASA and Arctic Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DnB ASA and Arctic Fish Holding, you can compare the effects of market volatilities on DnB ASA and Arctic Fish 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 DnB ASA with a short position of Arctic Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of DnB ASA and Arctic Fish.
Diversification Opportunities for DnB ASA and Arctic Fish
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DnB and Arctic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding DnB ASA and Arctic Fish Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Fish Holding and DnB 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 DnB ASA are associated (or correlated) with Arctic Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Fish Holding has no effect on the direction of DnB ASA i.e., DnB ASA and Arctic Fish go up and down completely randomly.
Pair Corralation between DnB ASA and Arctic Fish
Assuming the 90 days trading horizon DnB ASA is expected to generate 0.18 times more return on investment than Arctic Fish. However, DnB ASA is 5.63 times less risky than Arctic Fish. It trades about 0.09 of its potential returns per unit of risk. Arctic Fish Holding is currently generating about 0.01 per unit of risk. If you would invest 22,720 in DnB ASA on September 1, 2024 and sell it today you would earn a total of 350.00 from holding DnB ASA or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
DnB ASA vs. Arctic Fish Holding
Performance |
| Timeline |
| DnB ASA |
| Arctic Fish Holding |
DnB ASA and Arctic Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DnB ASA and Arctic Fish
The main advantage of trading using opposite DnB ASA and Arctic Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DnB ASA position performs unexpectedly, Arctic Fish 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 Arctic Fish will offset losses from the drop in Arctic Fish's long position.| DnB ASA vs. Telenor ASA | DnB ASA vs. Storebrand ASA | DnB ASA vs. Orkla ASA | DnB ASA vs. Gjensidige Forsikring ASA |
| Arctic Fish vs. Andfjord Salmon AS | Arctic Fish vs. Elkem ASA | Arctic Fish vs. Integrated Wind Solutions | Arctic Fish vs. Vow 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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