Correlation Between Equinor ASA and LianDi Clean
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and LianDi Clean 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 LianDi Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA ADR and LianDi Clean Technology, you can compare the effects of market volatilities on Equinor ASA and LianDi Clean 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 LianDi Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and LianDi Clean.
Diversification Opportunities for Equinor ASA and LianDi Clean
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Equinor and LianDi is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and LianDi Clean Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianDi Clean Technology 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 ADR are associated (or correlated) with LianDi Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianDi Clean Technology has no effect on the direction of Equinor ASA i.e., Equinor ASA and LianDi Clean go up and down completely randomly.
Pair Corralation between Equinor ASA and LianDi Clean
Given the investment horizon of 90 days Equinor ASA is expected to generate 15.76 times less return on investment than LianDi Clean. But when comparing it to its historical volatility, Equinor ASA ADR is 3.4 times less risky than LianDi Clean. It trades about 0.0 of its potential returns per unit of risk. LianDi Clean Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 0.02 in LianDi Clean Technology on September 1, 2024 and sell it today you would earn a total of 0.00 from holding LianDi Clean Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Equinor ASA ADR vs. LianDi Clean Technology
Performance |
| Timeline |
| Equinor ASA ADR |
| LianDi Clean Technology |
Equinor ASA and LianDi Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and LianDi Clean
The main advantage of trading using opposite Equinor ASA and LianDi Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, LianDi Clean 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 LianDi Clean will offset losses from the drop in LianDi Clean's long position.| Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR | Equinor ASA vs. Galp Energa |
| LianDi Clean vs. Petroleo Brasileiro Petrobras | LianDi Clean vs. Equinor ASA ADR | LianDi Clean vs. Eni SpA ADR | LianDi Clean vs. YPF Sociedad Anonima |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |