Correlation Between Orkla ASA and Atea ASA
Can any of the company-specific risk be diversified away by investing in both Orkla ASA and Atea 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 Atea 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 Atea ASA, you can compare the effects of market volatilities on Orkla ASA and Atea 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 Atea ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orkla ASA and Atea ASA.
Diversification Opportunities for Orkla ASA and Atea ASA
Average diversification
The 3 months correlation between Orkla and Atea is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Orkla ASA and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea 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 Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of Orkla ASA i.e., Orkla ASA and Atea ASA go up and down completely randomly.
Pair Corralation between Orkla ASA and Atea ASA
Assuming the 90 days trading horizon Orkla ASA is expected to generate 0.75 times more return on investment than Atea ASA. However, Orkla ASA is 1.33 times less risky than Atea ASA. It trades about 0.08 of its potential returns per unit of risk. Atea ASA is currently generating about 0.0 per unit of risk. If you would invest 7,165 in Orkla ASA on October 24, 2024 and sell it today you would earn a total of 2,865 from holding Orkla ASA or generate 39.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orkla ASA vs. Atea ASA
Performance |
| Timeline |
| Orkla ASA |
| Atea ASA |
Orkla ASA and Atea ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orkla ASA and Atea ASA
The main advantage of trading using opposite Orkla ASA and Atea ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orkla ASA position performs unexpectedly, Atea 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 Atea ASA will offset losses from the drop in Atea ASA's long position.| Orkla ASA vs. Telenor ASA | Orkla ASA vs. DnB ASA | Orkla ASA vs. Yara International ASA | Orkla ASA vs. Storebrand ASA |
| Atea ASA vs. Gjensidige Forsikring ASA | Atea ASA vs. Veidekke ASA | Atea ASA vs. Orkla ASA | Atea ASA vs. Aker 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 Stocks Directory module to find actively traded stocks across global markets.
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