Correlation Between Lea Bank and Arcticzymes Technologies
Can any of the company-specific risk be diversified away by investing in both Lea Bank and Arcticzymes Technologies 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 Lea Bank and Arcticzymes Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lea Bank ASA and Arcticzymes Technologies ASA, you can compare the effects of market volatilities on Lea Bank and Arcticzymes Technologies 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 Lea Bank with a short position of Arcticzymes Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lea Bank and Arcticzymes Technologies.
Diversification Opportunities for Lea Bank and Arcticzymes Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lea and Arcticzymes is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lea Bank ASA and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes Technologies and Lea Bank 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 Lea Bank ASA are associated (or correlated) with Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Lea Bank i.e., Lea Bank and Arcticzymes Technologies go up and down completely randomly.
Pair Corralation between Lea Bank and Arcticzymes Technologies
Assuming the 90 days trading horizon Lea Bank ASA is expected to generate 0.73 times more return on investment than Arcticzymes Technologies. However, Lea Bank ASA is 1.36 times less risky than Arcticzymes Technologies. It trades about 0.03 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about -0.08 per unit of risk. If you would invest 701.00 in Lea Bank ASA on August 25, 2024 and sell it today you would earn a total of 149.00 from holding Lea Bank ASA or generate 21.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lea Bank ASA vs. Arcticzymes Technologies ASA
Performance |
| Timeline |
| Lea Bank ASA |
| Arcticzymes Technologies |
Lea Bank and Arcticzymes Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lea Bank and Arcticzymes Technologies
The main advantage of trading using opposite Lea Bank and Arcticzymes Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lea Bank position performs unexpectedly, Arcticzymes Technologies 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 Arcticzymes Technologies will offset losses from the drop in Arcticzymes Technologies' long position.| Lea Bank vs. Arcticzymes Technologies ASA | Lea Bank vs. Nordic Mining ASA | Lea Bank vs. Morrow Bank ASA | Lea Bank vs. River Tech plc |
| Arcticzymes Technologies vs. Carasent ASA | Arcticzymes Technologies vs. Bergenbio ASA | Arcticzymes Technologies vs. Photocure | Arcticzymes Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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