Correlation Between Equinor ASA and Strattner Financial
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Strattner Financial 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 Strattner Financial 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 Strattner Financial Group, you can compare the effects of market volatilities on Equinor ASA and Strattner Financial 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 Strattner Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Strattner Financial.
Diversification Opportunities for Equinor ASA and Strattner Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equinor and Strattner is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and Strattner Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strattner Financial 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 Strattner Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strattner Financial has no effect on the direction of Equinor ASA i.e., Equinor ASA and Strattner Financial go up and down completely randomly.
Pair Corralation between Equinor ASA and Strattner Financial
Given the investment horizon of 90 days Equinor ASA ADR is expected to under-perform the Strattner Financial. But the stock apears to be less risky and, when comparing its historical volatility, Equinor ASA ADR is 51.56 times less risky than Strattner Financial. The stock trades about -0.03 of its potential returns per unit of risk. The Strattner Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Strattner Financial Group on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Strattner Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinor ASA ADR vs. Strattner Financial Group
Performance |
| Timeline |
| Equinor ASA ADR |
| Strattner Financial |
Equinor ASA and Strattner Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Strattner Financial
The main advantage of trading using opposite Equinor ASA and Strattner Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Strattner Financial 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 Strattner Financial will offset losses from the drop in Strattner Financial's long position.The idea behind Equinor ASA ADR and Strattner Financial Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Strattner Financial vs. Seadrill Limited | Strattner Financial vs. Noble plc | Strattner Financial vs. Borr Drilling | Strattner Financial vs. SCOR PK |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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