Correlation Between Entra ASA and Arctic Fish
Can any of the company-specific risk be diversified away by investing in both Entra ASA and Arctic Fish 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 Entra ASA and Arctic Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entra ASA and Arctic Fish Holding, you can compare the effects of market volatilities on Entra ASA and Arctic Fish 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 Entra ASA with a short position of Arctic Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entra ASA and Arctic Fish.
Diversification Opportunities for Entra ASA and Arctic Fish
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Entra and Arctic is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Entra ASA and Arctic Fish Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Fish Holding and Entra 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 Entra ASA are associated (or correlated) with Arctic Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Fish Holding has no effect on the direction of Entra ASA i.e., Entra ASA and Arctic Fish go up and down completely randomly.
Pair Corralation between Entra ASA and Arctic Fish
Assuming the 90 days trading horizon Entra ASA is expected to under-perform the Arctic Fish. But the stock apears to be less risky and, when comparing its historical volatility, Entra ASA is 2.69 times less risky than Arctic Fish. The stock trades about -0.08 of its potential returns per unit of risk. The Arctic Fish Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,050 in Arctic Fish Holding on August 29, 2024 and sell it today you would lose (50.00) from holding Arctic Fish Holding or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entra ASA vs. Arctic Fish Holding
Performance |
| Timeline |
| Entra ASA |
| Arctic Fish Holding |
Entra ASA and Arctic Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entra ASA and Arctic Fish
The main advantage of trading using opposite Entra ASA and Arctic Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entra ASA position performs unexpectedly, Arctic Fish 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 Arctic Fish will offset losses from the drop in Arctic Fish's long position.| Entra ASA vs. Gjensidige Forsikring ASA | Entra ASA vs. Storebrand ASA | Entra ASA vs. Olav Thon Eien | Entra ASA vs. DnB ASA |
| Arctic Fish vs. Icelandic Salmon As | Arctic Fish vs. Ice Fish Farm | Arctic Fish vs. Salmon Evolution Holding | Arctic Fish vs. Atlantic Sapphire As |
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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