Correlation Between Nel ASA and AutoStore Holdings
Can any of the company-specific risk be diversified away by investing in both Nel ASA and AutoStore Holdings 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 Nel ASA and AutoStore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nel ASA and AutoStore Holdings, you can compare the effects of market volatilities on Nel ASA and AutoStore Holdings 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 Nel ASA with a short position of AutoStore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nel ASA and AutoStore Holdings.
Diversification Opportunities for Nel ASA and AutoStore Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nel and AutoStore is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nel ASA and AutoStore Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoStore Holdings and Nel 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 Nel ASA are associated (or correlated) with AutoStore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoStore Holdings has no effect on the direction of Nel ASA i.e., Nel ASA and AutoStore Holdings go up and down completely randomly.
Pair Corralation between Nel ASA and AutoStore Holdings
Assuming the 90 days trading horizon Nel ASA is expected to under-perform the AutoStore Holdings. In addition to that, Nel ASA is 1.02 times more volatile than AutoStore Holdings. It trades about -0.07 of its total potential returns per unit of risk. AutoStore Holdings is currently generating about -0.01 per unit of volatility. If you would invest 2,060 in AutoStore Holdings on September 3, 2024 and sell it today you would lose (823.00) from holding AutoStore Holdings or give up 39.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nel ASA vs. AutoStore Holdings
Performance |
| Timeline |
| Nel ASA |
| AutoStore Holdings |
Nel ASA and AutoStore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nel ASA and AutoStore Holdings
The main advantage of trading using opposite Nel ASA and AutoStore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nel ASA position performs unexpectedly, AutoStore Holdings 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 AutoStore Holdings will offset losses from the drop in AutoStore Holdings' long position.The idea behind Nel ASA and AutoStore Holdings 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.| AutoStore Holdings vs. Nordic Semiconductor ASA | AutoStore Holdings vs. Aker BP ASA | AutoStore Holdings vs. SalMar ASA | AutoStore Holdings vs. Scatec Solar OL |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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