Correlation Between Elkem ASA and Helgeland Sparebank
Can any of the company-specific risk be diversified away by investing in both Elkem ASA and Helgeland 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 Elkem ASA and Helgeland Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and Helgeland Sparebank, you can compare the effects of market volatilities on Elkem ASA and Helgeland 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 Elkem ASA with a short position of Helgeland Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and Helgeland Sparebank.
Diversification Opportunities for Elkem ASA and Helgeland Sparebank
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elkem and Helgeland is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and Helgeland Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helgeland Sparebank 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 Helgeland Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helgeland Sparebank has no effect on the direction of Elkem ASA i.e., Elkem ASA and Helgeland Sparebank go up and down completely randomly.
Pair Corralation between Elkem ASA and Helgeland Sparebank
Assuming the 90 days trading horizon Elkem ASA is expected to generate 1.19 times more return on investment than Helgeland Sparebank. However, Elkem ASA is 1.19 times more volatile than Helgeland Sparebank. It trades about 0.08 of its potential returns per unit of risk. Helgeland Sparebank is currently generating about -0.07 per unit of risk. If you would invest 1,800 in Elkem ASA on September 5, 2024 and sell it today you would earn a total of 51.00 from holding Elkem ASA or generate 2.83% 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. Helgeland Sparebank
Performance |
| Timeline |
| Elkem ASA |
| Helgeland Sparebank |
Elkem ASA and Helgeland Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and Helgeland Sparebank
The main advantage of trading using opposite Elkem ASA and Helgeland Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA position performs unexpectedly, Helgeland 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 Helgeland Sparebank will offset losses from the drop in Helgeland Sparebank's long position.| Elkem ASA vs. Yara International ASA | Elkem ASA vs. Equinor ASA | Elkem ASA vs. Telenor ASA | Elkem ASA vs. Orkla ASA |
| Helgeland Sparebank vs. Holand og Setskog | Helgeland Sparebank vs. Elkem ASA | Helgeland Sparebank vs. Integrated Wind Solutions | Helgeland Sparebank 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |