Correlation Between Instabank ASA and Alternus Energy
Can any of the company-specific risk be diversified away by investing in both Instabank ASA and Alternus Energy 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 Instabank ASA and Alternus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instabank ASA and Alternus Energy Group, you can compare the effects of market volatilities on Instabank ASA and Alternus Energy 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 Instabank ASA with a short position of Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Alternus Energy.
Diversification Opportunities for Instabank ASA and Alternus Energy
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Instabank and Alternus is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Instabank ASA and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group and Instabank 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 Instabank ASA are associated (or correlated) with Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of Instabank ASA i.e., Instabank ASA and Alternus Energy go up and down completely randomly.
Pair Corralation between Instabank ASA and Alternus Energy
Assuming the 90 days trading horizon Instabank ASA is expected to generate 2.76 times less return on investment than Alternus Energy. But when comparing it to its historical volatility, Instabank ASA is 18.37 times less risky than Alternus Energy. It trades about 0.4 of its potential returns per unit of risk. Alternus Energy Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Alternus Energy Group on September 13, 2024 and sell it today you would lose (2.00) from holding Alternus Energy Group or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instabank ASA vs. Alternus Energy Group
Performance |
| Timeline |
| Instabank ASA |
| Alternus Energy Group |
Instabank ASA and Alternus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instabank ASA and Alternus Energy
The main advantage of trading using opposite Instabank ASA and Alternus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instabank ASA position performs unexpectedly, Alternus Energy 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 Alternus Energy will offset losses from the drop in Alternus Energy's long position.| Instabank ASA vs. NorAm Drilling AS | Instabank ASA vs. Techstep ASA | Instabank ASA vs. Odfjell Technology | Instabank ASA vs. Nordic Technology Group |
| Alternus Energy vs. Grong Sparebank | Alternus Energy vs. Shelf Drilling | Alternus Energy vs. Aasen Sparebank | Alternus Energy vs. Instabank 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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