Correlation Between Holand Og and REC Silicon
Can any of the company-specific risk be diversified away by investing in both Holand Og and REC Silicon 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 Holand Og and REC Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holand og Setskog and REC Silicon ASA, you can compare the effects of market volatilities on Holand Og and REC Silicon 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 Holand Og with a short position of REC Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holand Og and REC Silicon.
Diversification Opportunities for Holand Og and REC Silicon
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Holand and REC is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Holand og Setskog and REC Silicon ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REC Silicon ASA and Holand Og 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 Holand og Setskog are associated (or correlated) with REC Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REC Silicon ASA has no effect on the direction of Holand Og i.e., Holand Og and REC Silicon go up and down completely randomly.
Pair Corralation between Holand Og and REC Silicon
Assuming the 90 days trading horizon Holand Og is expected to generate 1.86 times less return on investment than REC Silicon. But when comparing it to its historical volatility, Holand og Setskog is 5.18 times less risky than REC Silicon. It trades about 0.07 of its potential returns per unit of risk. REC Silicon ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 144.00 in REC Silicon ASA on November 4, 2024 and sell it today you would lose (2.00) from holding REC Silicon ASA or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holand og Setskog vs. REC Silicon ASA
Performance |
| Timeline |
| Holand og Setskog |
| REC Silicon ASA |
Holand Og and REC Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holand Og and REC Silicon
The main advantage of trading using opposite Holand Og and REC Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holand Og position performs unexpectedly, REC Silicon 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 REC Silicon will offset losses from the drop in REC Silicon's long position.| Holand Og vs. Melhus Sparebank | Holand Og vs. Aurskog Sparebank | Holand Og vs. Sparebanken Sor | Holand Og vs. Sparebank 1 Ringerike |
| REC Silicon vs. Aker Horizons AS | REC Silicon vs. MPC Container Ships | REC Silicon vs. Aker Carbon Capture | REC Silicon vs. Nordic Semiconductor 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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