Correlation Between Elopak AS and AF Gruppen
Can any of the company-specific risk be diversified away by investing in both Elopak AS and AF Gruppen 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 Elopak AS and AF Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elopak AS and AF Gruppen ASA, you can compare the effects of market volatilities on Elopak AS and AF Gruppen 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 Elopak AS with a short position of AF Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elopak AS and AF Gruppen.
Diversification Opportunities for Elopak AS and AF Gruppen
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elopak and AFG is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Elopak AS and AF Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AF Gruppen ASA and Elopak AS 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 Elopak AS are associated (or correlated) with AF Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AF Gruppen ASA has no effect on the direction of Elopak AS i.e., Elopak AS and AF Gruppen go up and down completely randomly.
Pair Corralation between Elopak AS and AF Gruppen
Assuming the 90 days trading horizon Elopak AS is expected to under-perform the AF Gruppen. But the stock apears to be less risky and, when comparing its historical volatility, Elopak AS is 1.18 times less risky than AF Gruppen. The stock trades about -0.15 of its potential returns per unit of risk. The AF Gruppen ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14,840 in AF Gruppen ASA on November 30, 2024 and sell it today you would lose (40.00) from holding AF Gruppen ASA or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elopak AS vs. AF Gruppen ASA
Performance |
| Timeline |
| Elopak AS |
| AF Gruppen ASA |
Elopak AS and AF Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elopak AS and AF Gruppen
The main advantage of trading using opposite Elopak AS and AF Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elopak AS position performs unexpectedly, AF Gruppen 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 AF Gruppen will offset losses from the drop in AF Gruppen's long position.| Elopak AS vs. Elkem ASA | Elopak AS vs. Norske Skog Asa | Elopak AS vs. Kitron ASA | Elopak AS vs. Europris ASA |
| AF Gruppen vs. Veidekke ASA | AF Gruppen vs. Gjensidige Forsikring ASA | AF Gruppen vs. Orkla ASA | AF Gruppen vs. Kongsberg Gruppen 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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