Correlation Between Elkem ASA and Selvaag Bolig
Can any of the company-specific risk be diversified away by investing in both Elkem ASA and Selvaag Bolig 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 Selvaag Bolig into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elkem ASA and Selvaag Bolig ASA, you can compare the effects of market volatilities on Elkem ASA and Selvaag Bolig 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 Selvaag Bolig. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elkem ASA and Selvaag Bolig.
Diversification Opportunities for Elkem ASA and Selvaag Bolig
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elkem and Selvaag is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Elkem ASA and Selvaag Bolig ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selvaag Bolig ASA 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 Selvaag Bolig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selvaag Bolig ASA has no effect on the direction of Elkem ASA i.e., Elkem ASA and Selvaag Bolig go up and down completely randomly.
Pair Corralation between Elkem ASA and Selvaag Bolig
Assuming the 90 days trading horizon Elkem ASA is expected to under-perform the Selvaag Bolig. In addition to that, Elkem ASA is 1.06 times more volatile than Selvaag Bolig ASA. It trades about -0.03 of its total potential returns per unit of risk. Selvaag Bolig ASA is currently generating about 0.03 per unit of volatility. If you would invest 2,648 in Selvaag Bolig ASA on August 26, 2024 and sell it today you would earn a total of 537.00 from holding Selvaag Bolig ASA or generate 20.28% 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. Selvaag Bolig ASA
Performance |
| Timeline |
| Elkem ASA |
| Selvaag Bolig ASA |
Elkem ASA and Selvaag Bolig Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elkem ASA and Selvaag Bolig
The main advantage of trading using opposite Elkem ASA and Selvaag Bolig positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elkem ASA position performs unexpectedly, Selvaag Bolig 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 Selvaag Bolig will offset losses from the drop in Selvaag Bolig's long position.| Elkem ASA vs. Goodtech | Elkem ASA vs. Havila Shipping ASA | Elkem ASA vs. Eidesvik Offshore ASA | Elkem ASA vs. Byggma |
| Selvaag Bolig vs. Veidekke ASA | Selvaag Bolig vs. Entra ASA | Selvaag Bolig vs. Kid ASA | Selvaag Bolig vs. Olav Thon Eien |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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