Correlation Between Matas AS and Per Aarsleff
Can any of the company-specific risk be diversified away by investing in both Matas AS and Per Aarsleff 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 Matas AS and Per Aarsleff into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matas AS and Per Aarsleff Holding, you can compare the effects of market volatilities on Matas AS and Per Aarsleff 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 Matas AS with a short position of Per Aarsleff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matas AS and Per Aarsleff.
Diversification Opportunities for Matas AS and Per Aarsleff
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Matas and Per is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and Per Aarsleff Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Per Aarsleff Holding and Matas AS 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 Matas AS are associated (or correlated) with Per Aarsleff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Per Aarsleff Holding has no effect on the direction of Matas AS i.e., Matas AS and Per Aarsleff go up and down completely randomly.
Pair Corralation between Matas AS and Per Aarsleff
Assuming the 90 days trading horizon Matas AS is expected to under-perform the Per Aarsleff. In addition to that, Matas AS is 1.07 times more volatile than Per Aarsleff Holding. It trades about -0.05 of its total potential returns per unit of risk. Per Aarsleff Holding is currently generating about 0.21 per unit of volatility. If you would invest 41,650 in Per Aarsleff Holding on August 25, 2024 and sell it today you would earn a total of 3,550 from holding Per Aarsleff Holding or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matas AS vs. Per Aarsleff Holding
Performance |
| Timeline |
| Matas AS |
| Per Aarsleff Holding |
Matas AS and Per Aarsleff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matas AS and Per Aarsleff
The main advantage of trading using opposite Matas AS and Per Aarsleff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matas AS position performs unexpectedly, Per Aarsleff 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 Per Aarsleff will offset losses from the drop in Per Aarsleff's long position.The idea behind Matas AS and Per Aarsleff Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Per Aarsleff vs. Schouw Co | Per Aarsleff vs. ROCKWOOL International AS | Per Aarsleff vs. Royal Unibrew AS | Per Aarsleff vs. Matas AS |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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