Correlation Between Itera ASA and Crayon Group
Can any of the company-specific risk be diversified away by investing in both Itera ASA and Crayon Group 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 Itera ASA and Crayon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itera ASA and Crayon Group Holding, you can compare the effects of market volatilities on Itera ASA and Crayon Group 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 Itera ASA with a short position of Crayon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itera ASA and Crayon Group.
Diversification Opportunities for Itera ASA and Crayon Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Itera and Crayon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Itera ASA and Crayon Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crayon Group Holding and Itera 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 Itera ASA are associated (or correlated) with Crayon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crayon Group Holding has no effect on the direction of Itera ASA i.e., Itera ASA and Crayon Group go up and down completely randomly.
Pair Corralation between Itera ASA and Crayon Group
Assuming the 90 days trading horizon Itera ASA is expected to under-perform the Crayon Group. But the stock apears to be less risky and, when comparing its historical volatility, Itera ASA is 1.29 times less risky than Crayon Group. The stock trades about -0.06 of its potential returns per unit of risk. The Crayon Group Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11,320 in Crayon Group Holding on September 1, 2024 and sell it today you would earn a total of 1,330 from holding Crayon Group Holding or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Itera ASA vs. Crayon Group Holding
Performance |
| Timeline |
| Itera ASA |
| Crayon Group Holding |
Itera ASA and Crayon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itera ASA and Crayon Group
The main advantage of trading using opposite Itera ASA and Crayon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itera ASA position performs unexpectedly, Crayon Group 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 Crayon Group will offset losses from the drop in Crayon Group's long position.| Itera ASA vs. Sogn Sparebank | Itera ASA vs. Nordic Technology Group | Itera ASA vs. SpareBank 1 stlandet | Itera ASA vs. Kraft Bank Asa |
| Crayon Group vs. Zaptec AS | Crayon Group vs. Nordic Semiconductor ASA | Crayon Group vs. Scatec Solar OL | Crayon Group vs. Kitron 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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