Correlation Between Erria AS and Aquaporin
Can any of the company-specific risk be diversified away by investing in both Erria AS and Aquaporin 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 Erria AS and Aquaporin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erria AS and Aquaporin AS, you can compare the effects of market volatilities on Erria AS and Aquaporin 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 Erria AS with a short position of Aquaporin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erria AS and Aquaporin.
Diversification Opportunities for Erria AS and Aquaporin
Poor diversification
The 3 months correlation between Erria and Aquaporin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Erria AS and Aquaporin AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquaporin AS and Erria AS 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 Erria AS are associated (or correlated) with Aquaporin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquaporin AS has no effect on the direction of Erria AS i.e., Erria AS and Aquaporin go up and down completely randomly.
Pair Corralation between Erria AS and Aquaporin
Assuming the 90 days trading horizon Erria AS is expected to generate 0.84 times more return on investment than Aquaporin. However, Erria AS is 1.2 times less risky than Aquaporin. It trades about 0.0 of its potential returns per unit of risk. Aquaporin AS is currently generating about -0.06 per unit of risk. If you would invest 417.00 in Erria AS on September 12, 2024 and sell it today you would lose (115.00) from holding Erria AS or give up 27.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erria AS vs. Aquaporin AS
Performance |
| Timeline |
| Erria AS |
| Aquaporin AS |
Erria AS and Aquaporin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erria AS and Aquaporin
The main advantage of trading using opposite Erria AS and Aquaporin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erria AS position performs unexpectedly, Aquaporin 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 Aquaporin will offset losses from the drop in Aquaporin's long position.| Erria AS vs. PARKEN Sport Entertainment | Erria AS vs. Hvidbjerg Bank | Erria AS vs. Nordinvestments AS | Erria AS vs. North Media AS |
| Aquaporin vs. Green Hydrogen Systems | Aquaporin vs. FOM Technologies AS | Aquaporin vs. ALK Abell AS | Aquaporin vs. Trifork Holding AG |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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