Correlation Between Equinor ASA and Arcticzymes Technologies
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Arcticzymes Technologies 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 Equinor ASA and Arcticzymes Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA and Arcticzymes Technologies ASA, you can compare the effects of market volatilities on Equinor ASA and Arcticzymes Technologies 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 Equinor ASA with a short position of Arcticzymes Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Arcticzymes Technologies.
Diversification Opportunities for Equinor ASA and Arcticzymes Technologies
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equinor and Arcticzymes is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes Technologies and Equinor 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 Equinor ASA are associated (or correlated) with Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Equinor ASA i.e., Equinor ASA and Arcticzymes Technologies go up and down completely randomly.
Pair Corralation between Equinor ASA and Arcticzymes Technologies
Assuming the 90 days trading horizon Equinor ASA is expected to generate 0.48 times more return on investment than Arcticzymes Technologies. However, Equinor ASA is 2.08 times less risky than Arcticzymes Technologies. It trades about 0.02 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about -0.25 per unit of risk. If you would invest 26,501 in Equinor ASA on August 29, 2024 and sell it today you would earn a total of 99.00 from holding Equinor ASA or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinor ASA vs. Arcticzymes Technologies ASA
Performance |
| Timeline |
| Equinor ASA |
| Arcticzymes Technologies |
Equinor ASA and Arcticzymes Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Arcticzymes Technologies
The main advantage of trading using opposite Equinor ASA and Arcticzymes Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Arcticzymes Technologies 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 Arcticzymes Technologies will offset losses from the drop in Arcticzymes Technologies' long position.| Equinor ASA vs. DnB ASA | Equinor ASA vs. Mowi ASA | Equinor ASA vs. Yara International ASA | Equinor ASA vs. Telenor ASA |
| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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