Correlation Between Dno ASA and Prospera Energy
Can any of the company-specific risk be diversified away by investing in both Dno ASA and Prospera Energy 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 Dno ASA and Prospera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dno ASA and Prospera Energy, you can compare the effects of market volatilities on Dno ASA and Prospera Energy 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 Dno ASA with a short position of Prospera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Prospera Energy.
Diversification Opportunities for Dno ASA and Prospera Energy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dno and Prospera is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Prospera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospera Energy and Dno 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 Dno ASA are associated (or correlated) with Prospera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospera Energy has no effect on the direction of Dno ASA i.e., Dno ASA and Prospera Energy go up and down completely randomly.
Pair Corralation between Dno ASA and Prospera Energy
Assuming the 90 days horizon Dno ASA is expected to generate 1.58 times less return on investment than Prospera Energy. But when comparing it to its historical volatility, Dno ASA is 1.49 times less risky than Prospera Energy. It trades about 0.31 of its potential returns per unit of risk. Prospera Energy is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2.10 in Prospera Energy on November 3, 2024 and sell it today you would earn a total of 0.98 from holding Prospera Energy or generate 46.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dno ASA vs. Prospera Energy
Performance |
| Timeline |
| Dno ASA |
| Prospera Energy |
Dno ASA and Prospera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dno ASA and Prospera Energy
The main advantage of trading using opposite Dno ASA and Prospera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dno ASA position performs unexpectedly, Prospera Energy 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 Prospera Energy will offset losses from the drop in Prospera Energy's long position.| Dno ASA vs. PetroShale | Dno ASA vs. Horizon Oil Limited | Dno ASA vs. Enwell Energy plc | Dno ASA vs. Tullow Oil plc |
| Prospera Energy vs. ROK Resources | Prospera Energy vs. PetroShale | Prospera Energy vs. Pieridae Energy Limited | Prospera Energy vs. Bengal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |