Correlation Between Equinor ASA and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Equinor ASA 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 Equinor ASA 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 Equinor ASA, you can compare the effects of market volatilities on Equinor ASA and Equinor ASA 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 Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Equinor ASA.
Diversification Opportunities for Equinor ASA and Equinor ASA
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equinor and Equinor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of Equinor ASA i.e., Equinor ASA and Equinor ASA go up and down completely randomly.
Pair Corralation between Equinor ASA and Equinor ASA
Given the investment horizon of 90 days Equinor ASA is expected to generate 1.18 times less return on investment than Equinor ASA. But when comparing it to its historical volatility, Equinor ASA ADR is 1.28 times less risky than Equinor ASA. It trades about 0.11 of its potential returns per unit of risk. Equinor ASA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,319 in Equinor ASA on August 24, 2024 and sell it today you would earn a total of 140.00 from holding Equinor ASA or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinor ASA ADR vs. Equinor ASA
Performance |
| Timeline |
| Equinor ASA ADR |
| Equinor ASA |
Equinor ASA and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Equinor ASA
The main advantage of trading using opposite Equinor ASA and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA'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 |
| Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. Equinor ASA ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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