Correlation Between Elkem ASA and Salmon Evolution
Can any of the company-specific risk be diversified away by investing in both Elkem ASA and Salmon Evolution 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 Salmon Evolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and Salmon Evolution Holding, you can compare the effects of market volatilities on Elkem ASA and Salmon Evolution 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 Salmon Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and Salmon Evolution.
Diversification Opportunities for Elkem ASA and Salmon Evolution
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elkem and Salmon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and Salmon Evolution Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salmon Evolution Holding 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 Salmon Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salmon Evolution Holding has no effect on the direction of Elkem ASA i.e., Elkem ASA and Salmon Evolution go up and down completely randomly.
Pair Corralation between Elkem ASA and Salmon Evolution
Assuming the 90 days trading horizon Elkem ASA is expected to generate 0.93 times more return on investment than Salmon Evolution. However, Elkem ASA is 1.07 times less risky than Salmon Evolution. It trades about 0.08 of its potential returns per unit of risk. Salmon Evolution Holding is currently generating about -0.02 per unit of risk. If you would invest 1,775 in Elkem ASA on September 2, 2024 and sell it today you would earn a total of 46.00 from holding Elkem ASA or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elkem ASA vs. Salmon Evolution Holding
Performance |
| Timeline |
| Elkem ASA |
| Salmon Evolution Holding |
Elkem ASA and Salmon Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and Salmon Evolution
The main advantage of trading using opposite Elkem ASA and Salmon Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA position performs unexpectedly, Salmon Evolution 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 Salmon Evolution will offset losses from the drop in Salmon Evolution'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 |
| Salmon Evolution vs. Elkem ASA | Salmon Evolution vs. Integrated Wind Solutions | Salmon Evolution vs. Vow ASA | Salmon Evolution vs. North Energy 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |