Correlation Between Goodtech and AF Gruppen
Can any of the company-specific risk be diversified away by investing in both Goodtech and AF Gruppen 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 Goodtech and AF Gruppen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodtech and AF Gruppen ASA, you can compare the effects of market volatilities on Goodtech and AF Gruppen 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 Goodtech with a short position of AF Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodtech and AF Gruppen.
Diversification Opportunities for Goodtech and AF Gruppen
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goodtech and AFG is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Goodtech and AF Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AF Gruppen ASA and Goodtech 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 Goodtech are associated (or correlated) with AF Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AF Gruppen ASA has no effect on the direction of Goodtech i.e., Goodtech and AF Gruppen go up and down completely randomly.
Pair Corralation between Goodtech and AF Gruppen
Assuming the 90 days trading horizon Goodtech is expected to under-perform the AF Gruppen. In addition to that, Goodtech is 1.6 times more volatile than AF Gruppen ASA. It trades about -0.16 of its total potential returns per unit of risk. AF Gruppen ASA is currently generating about 0.25 per unit of volatility. If you would invest 13,140 in AF Gruppen ASA on August 31, 2024 and sell it today you would earn a total of 820.00 from holding AF Gruppen ASA or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodtech vs. AF Gruppen ASA
Performance |
| Timeline |
| Goodtech |
| AF Gruppen ASA |
Goodtech and AF Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodtech and AF Gruppen
The main advantage of trading using opposite Goodtech and AF Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodtech position performs unexpectedly, AF Gruppen 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 AF Gruppen will offset losses from the drop in AF Gruppen's long position.| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Borgestad A | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA |
| AF Gruppen vs. Veidekke ASA | AF Gruppen vs. Gjensidige Forsikring ASA | AF Gruppen vs. Orkla ASA | AF Gruppen vs. Kongsberg Gruppen ASA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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