Correlation Between Green Minerals and Vow ASA
Can any of the company-specific risk be diversified away by investing in both Green Minerals and Vow 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 Green Minerals and Vow ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Minerals AS and Vow ASA, you can compare the effects of market volatilities on Green Minerals and Vow 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 Green Minerals with a short position of Vow ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Minerals and Vow ASA.
Diversification Opportunities for Green Minerals and Vow ASA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Green and Vow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Green Minerals AS and Vow ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow ASA and Green Minerals 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 Green Minerals AS are associated (or correlated) with Vow ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow ASA has no effect on the direction of Green Minerals i.e., Green Minerals and Vow ASA go up and down completely randomly.
Pair Corralation between Green Minerals and Vow ASA
Assuming the 90 days trading horizon Green Minerals AS is expected to generate 0.4 times more return on investment than Vow ASA. However, Green Minerals AS is 2.51 times less risky than Vow ASA. It trades about -0.07 of its potential returns per unit of risk. Vow ASA is currently generating about -0.26 per unit of risk. If you would invest 690.00 in Green Minerals AS on September 1, 2024 and sell it today you would lose (42.00) from holding Green Minerals AS or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Minerals AS vs. Vow ASA
Performance |
| Timeline |
| Green Minerals AS |
| Vow ASA |
Green Minerals and Vow ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Minerals and Vow ASA
The main advantage of trading using opposite Green Minerals and Vow ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Minerals position performs unexpectedly, Vow 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 Vow ASA will offset losses from the drop in Vow ASA's long position.| Green Minerals vs. Nordic Technology Group | Green Minerals vs. Morrow Bank ASA | Green Minerals vs. Odfjell Technology | Green Minerals vs. Sparebank 1 SMN |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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