Correlation Between Elkem ASA and Everfuel
Can any of the company-specific risk be diversified away by investing in both Elkem ASA and Everfuel 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 Elkem ASA and Everfuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and Everfuel AS, you can compare the effects of market volatilities on Elkem ASA and Everfuel 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 Elkem ASA with a short position of Everfuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and Everfuel.
Diversification Opportunities for Elkem ASA and Everfuel
Good diversification
The 3 months correlation between Elkem and Everfuel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and Everfuel AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everfuel AS and Elkem 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 Elkem ASA are associated (or correlated) with Everfuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everfuel AS has no effect on the direction of Elkem ASA i.e., Elkem ASA and Everfuel go up and down completely randomly.
Pair Corralation between Elkem ASA and Everfuel
Assuming the 90 days trading horizon Elkem ASA is expected to under-perform the Everfuel. In addition to that, Elkem ASA is 1.6 times more volatile than Everfuel AS. It trades about -0.06 of its total potential returns per unit of risk. Everfuel AS is currently generating about 0.05 per unit of volatility. If you would invest 1,272 in Everfuel AS on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Everfuel AS or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elkem ASA vs. Everfuel AS
Performance |
| Timeline |
| Elkem ASA |
| Everfuel AS |
Elkem ASA and Everfuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and Everfuel
The main advantage of trading using opposite Elkem ASA and Everfuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA position performs unexpectedly, Everfuel 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 Everfuel will offset losses from the drop in Everfuel's long position.| Elkem ASA vs. Storebrand ASA | Elkem ASA vs. Yara International ASA | Elkem ASA vs. Lery Seafood Group | Elkem ASA vs. DnB 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |