Correlation Between Elkem ASA and River Tech
Can any of the company-specific risk be diversified away by investing in both Elkem ASA and River Tech 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 River Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and River Tech plc, you can compare the effects of market volatilities on Elkem ASA and River Tech 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 River Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and River Tech.
Diversification Opportunities for Elkem ASA and River Tech
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elkem and River is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and River Tech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River Tech plc 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 River Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River Tech plc has no effect on the direction of Elkem ASA i.e., Elkem ASA and River Tech go up and down completely randomly.
Pair Corralation between Elkem ASA and River Tech
Assuming the 90 days trading horizon Elkem ASA is expected to generate 0.48 times more return on investment than River Tech. However, Elkem ASA is 2.1 times less risky than River Tech. It trades about -0.02 of its potential returns per unit of risk. River Tech plc is currently generating about -0.02 per unit of risk. If you would invest 2,320 in Elkem ASA on August 26, 2024 and sell it today you would lose (498.00) from holding Elkem ASA or give up 21.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elkem ASA vs. River Tech plc
Performance |
| Timeline |
| Elkem ASA |
| River Tech plc |
Elkem ASA and River Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and River Tech
The main advantage of trading using opposite Elkem ASA and River Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA position performs unexpectedly, River Tech 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 River Tech will offset losses from the drop in River Tech's long position.| Elkem ASA vs. Goodtech | Elkem ASA vs. Havila Shipping ASA | Elkem ASA vs. Eidesvik Offshore ASA | Elkem ASA vs. Byggma |
| River Tech vs. Huddlestock Fintech As | River Tech vs. Xplora Technologies As | River Tech vs. Polight ASA | River Tech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |