Correlation Between Elkem ASA and Photocure
Can any of the company-specific risk be diversified away by investing in both Elkem ASA and Photocure 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 Photocure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and Photocure, you can compare the effects of market volatilities on Elkem ASA and Photocure 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 Photocure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and Photocure.
Diversification Opportunities for Elkem ASA and Photocure
Excellent diversification
The 3 months correlation between Elkem and Photocure is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and Photocure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photocure 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 Photocure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photocure has no effect on the direction of Elkem ASA i.e., Elkem ASA and Photocure go up and down completely randomly.
Pair Corralation between Elkem ASA and Photocure
Assuming the 90 days trading horizon Elkem ASA is expected to generate 0.98 times more return on investment than Photocure. However, Elkem ASA is 1.02 times less risky than Photocure. It trades about -0.11 of its potential returns per unit of risk. Photocure is currently generating about -0.77 per unit of risk. If you would invest 1,729 in Elkem ASA on October 22, 2024 and sell it today you would lose (46.00) from holding Elkem ASA or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Elkem ASA vs. Photocure
Performance |
| Timeline |
| Elkem ASA |
| Photocure |
Elkem ASA and Photocure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and Photocure
The main advantage of trading using opposite Elkem ASA and Photocure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA position performs unexpectedly, Photocure 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 Photocure will offset losses from the drop in Photocure'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 |
| Photocure vs. Pareto Bank ASA | Photocure vs. SpareBank 1 stlandet | Photocure vs. Sea1 Offshore | Photocure vs. Nordic Semiconductor 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |