Correlation Between Elkem ASA and Green Minerals
Can any of the company-specific risk be diversified away by investing in both Elkem ASA and Green Minerals 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 Green Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and Green Minerals AS, you can compare the effects of market volatilities on Elkem ASA and Green Minerals 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 Green Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and Green Minerals.
Diversification Opportunities for Elkem ASA and Green Minerals
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elkem and Green is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and Green Minerals AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Minerals 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 Green Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Minerals AS has no effect on the direction of Elkem ASA i.e., Elkem ASA and Green Minerals go up and down completely randomly.
Pair Corralation between Elkem ASA and Green Minerals
Assuming the 90 days trading horizon Elkem ASA is expected to under-perform the Green Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Elkem ASA is 2.54 times less risky than Green Minerals. The stock trades about -0.1 of its potential returns per unit of risk. The Green Minerals AS is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 321.00 in Green Minerals AS on October 23, 2024 and sell it today you would earn a total of 64.00 from holding Green Minerals AS or generate 19.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Elkem ASA vs. Green Minerals AS
Performance |
| Timeline |
| Elkem ASA |
| Green Minerals AS |
Elkem ASA and Green Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and Green Minerals
The main advantage of trading using opposite Elkem ASA and Green Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA position performs unexpectedly, Green Minerals 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 Green Minerals will offset losses from the drop in Green Minerals' long position.| Elkem ASA vs. Storebrand ASA | Elkem ASA vs. Yara International ASA | Elkem ASA vs. Lery Seafood Group | Elkem ASA vs. DnB ASA |
| Green Minerals vs. Sogn Sparebank | Green Minerals vs. Nidaros Sparebank | Green Minerals vs. Pareto Bank ASA | Green Minerals vs. Kraft Bank 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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