Correlation Between Orkla ASA and Aker ASA
Can any of the company-specific risk be diversified away by investing in both Orkla ASA and Aker ASA 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 Orkla ASA and Aker ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orkla ASA and Aker ASA, you can compare the effects of market volatilities on Orkla ASA and Aker ASA 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 Orkla ASA with a short position of Aker ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orkla ASA and Aker ASA.
Diversification Opportunities for Orkla ASA and Aker ASA
Very good diversification
The 3 months correlation between Orkla and Aker is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Orkla ASA and Aker ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker ASA and Orkla 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 Orkla ASA are associated (or correlated) with Aker ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker ASA has no effect on the direction of Orkla ASA i.e., Orkla ASA and Aker ASA go up and down completely randomly.
Pair Corralation between Orkla ASA and Aker ASA
Assuming the 90 days trading horizon Orkla ASA is expected to generate 0.93 times more return on investment than Aker ASA. However, Orkla ASA is 1.08 times less risky than Aker ASA. It trades about 0.12 of its potential returns per unit of risk. Aker ASA is currently generating about 0.0 per unit of risk. If you would invest 6,984 in Orkla ASA on August 25, 2024 and sell it today you would earn a total of 3,176 from holding Orkla ASA or generate 45.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orkla ASA vs. Aker ASA
Performance |
| Timeline |
| Orkla ASA |
| Aker ASA |
Orkla ASA and Aker ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orkla ASA and Aker ASA
The main advantage of trading using opposite Orkla ASA and Aker ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orkla ASA position performs unexpectedly, Aker ASA 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 ASA will offset losses from the drop in Aker ASA's long position.| Orkla ASA vs. Grieg Seafood ASA | Orkla ASA vs. SalMar ASA | Orkla ASA vs. Pf Bakkafrost | Orkla ASA vs. Mowi ASA |
| Aker ASA vs. Storebrand ASA | Aker ASA vs. Aker Solutions ASA | Aker ASA vs. DnB ASA | Aker ASA vs. Orkla 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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