Correlation Between Europris ASA and Crayon Group
Can any of the company-specific risk be diversified away by investing in both Europris ASA and Crayon Group 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 Europris ASA and Crayon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europris ASA and Crayon Group Holding, you can compare the effects of market volatilities on Europris ASA and Crayon Group 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 Europris ASA with a short position of Crayon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europris ASA and Crayon Group.
Diversification Opportunities for Europris ASA and Crayon Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Europris and Crayon is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Europris ASA and Crayon Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crayon Group Holding and Europris 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 Europris ASA are associated (or correlated) with Crayon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crayon Group Holding has no effect on the direction of Europris ASA i.e., Europris ASA and Crayon Group go up and down completely randomly.
Pair Corralation between Europris ASA and Crayon Group
Assuming the 90 days trading horizon Europris ASA is expected to under-perform the Crayon Group. But the stock apears to be less risky and, when comparing its historical volatility, Europris ASA is 2.42 times less risky than Crayon Group. The stock trades about -0.04 of its potential returns per unit of risk. The Crayon Group Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,990 in Crayon Group Holding on September 2, 2024 and sell it today you would earn a total of 1,660 from holding Crayon Group Holding or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europris ASA vs. Crayon Group Holding
Performance |
| Timeline |
| Europris ASA |
| Crayon Group Holding |
Europris ASA and Crayon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europris ASA and Crayon Group
The main advantage of trading using opposite Europris ASA and Crayon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europris ASA position performs unexpectedly, Crayon Group 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 Crayon Group will offset losses from the drop in Crayon Group's long position.| Europris ASA vs. Storebrand ASA | Europris ASA vs. XXL ASA | Europris ASA vs. Orkla ASA | Europris ASA vs. DnB ASA |
| Crayon Group vs. Zaptec AS | Crayon Group vs. Nordic Semiconductor ASA | Crayon Group vs. Scatec Solar OL | Crayon Group vs. Kitron 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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