Correlation Between EAM Solar and Aurskog Sparebank
Can any of the company-specific risk be diversified away by investing in both EAM Solar 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 EAM Solar and Aurskog Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAM Solar ASA and Aurskog Sparebank, you can compare the effects of market volatilities on EAM Solar 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 EAM Solar with a short position of Aurskog Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAM Solar and Aurskog Sparebank.
Diversification Opportunities for EAM Solar and Aurskog Sparebank
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EAM and Aurskog is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding EAM Solar ASA and Aurskog Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurskog Sparebank and EAM Solar 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 EAM Solar 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 EAM Solar i.e., EAM Solar and Aurskog Sparebank go up and down completely randomly.
Pair Corralation between EAM Solar and Aurskog Sparebank
Assuming the 90 days trading horizon EAM Solar ASA is expected to generate 36.77 times more return on investment than Aurskog Sparebank. However, EAM Solar is 36.77 times more volatile than Aurskog Sparebank. It trades about 0.05 of its potential returns per unit of risk. Aurskog Sparebank is currently generating about 0.05 per unit of risk. If you would invest 600.00 in EAM Solar ASA on September 13, 2024 and sell it today you would lose (584.00) from holding EAM Solar ASA or give up 97.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAM Solar ASA vs. Aurskog Sparebank
Performance |
| Timeline |
| EAM Solar ASA |
| Aurskog Sparebank |
EAM Solar and Aurskog Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAM Solar and Aurskog Sparebank
The main advantage of trading using opposite EAM Solar and Aurskog Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAM Solar 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.| EAM Solar vs. Morrow Bank ASA | EAM Solar vs. Norwegian Air Shuttle | EAM Solar vs. Grong Sparebank | EAM Solar vs. Nordic Semiconductor ASA |
| Aurskog Sparebank vs. Helgeland Sparebank | Aurskog Sparebank vs. Kongsberg Gruppen ASA | Aurskog Sparebank vs. Napatech AS | Aurskog Sparebank vs. Elkem 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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