Correlation Between Mills Music and Aker BP
Can any of the company-specific risk be diversified away by investing in both Mills Music and Aker BP 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 Mills Music and Aker BP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mills Music Trust and Aker BP ASA, you can compare the effects of market volatilities on Mills Music and Aker BP 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 Mills Music with a short position of Aker BP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mills Music and Aker BP.
Diversification Opportunities for Mills Music and Aker BP
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mills and Aker is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mills Music Trust and Aker BP ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker BP ASA and Mills Music 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 Mills Music Trust are associated (or correlated) with Aker BP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker BP ASA has no effect on the direction of Mills Music i.e., Mills Music and Aker BP go up and down completely randomly.
Pair Corralation between Mills Music and Aker BP
Assuming the 90 days horizon Mills Music Trust is expected to under-perform the Aker BP. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mills Music Trust is 2.62 times less risky than Aker BP. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Aker BP ASA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 904.00 in Aker BP ASA on October 24, 2024 and sell it today you would earn a total of 155.00 from holding Aker BP ASA or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Mills Music Trust vs. Aker BP ASA
Performance |
| Timeline |
| Mills Music Trust |
| Aker BP ASA |
Mills Music and Aker BP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mills Music and Aker BP
The main advantage of trading using opposite Mills Music and Aker BP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mills Music position performs unexpectedly, Aker BP 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 Aker BP will offset losses from the drop in Aker BP's long position.| Mills Music vs. Citrine Global Corp | Mills Music vs. Blue Water Ventures | Mills Music vs. DATA Communications Management | Mills Music vs. Aramark Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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