Correlation Between Orkla ASA and HAV Group
Can any of the company-specific risk be diversified away by investing in both Orkla ASA and HAV Group 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 HAV Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orkla ASA and HAV Group ASA, you can compare the effects of market volatilities on Orkla ASA and HAV Group 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 HAV Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orkla ASA and HAV Group.
Diversification Opportunities for Orkla ASA and HAV Group
Good diversification
The 3 months correlation between Orkla and HAV is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Orkla ASA and HAV Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAV Group 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 HAV Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAV Group ASA has no effect on the direction of Orkla ASA i.e., Orkla ASA and HAV Group go up and down completely randomly.
Pair Corralation between Orkla ASA and HAV Group
Assuming the 90 days trading horizon Orkla ASA is expected to generate 0.39 times more return on investment than HAV Group. However, Orkla ASA is 2.56 times less risky than HAV Group. It trades about 0.02 of its potential returns per unit of risk. HAV Group ASA is currently generating about -0.17 per unit of risk. If you would invest 9,945 in Orkla ASA on August 29, 2024 and sell it today you would earn a total of 85.00 from holding Orkla ASA or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orkla ASA vs. HAV Group ASA
Performance |
| Timeline |
| Orkla ASA |
| HAV Group ASA |
Orkla ASA and HAV Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orkla ASA and HAV Group
The main advantage of trading using opposite Orkla ASA and HAV Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orkla ASA position performs unexpectedly, HAV Group 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 HAV Group will offset losses from the drop in HAV Group's long position.| Orkla ASA vs. Telenor ASA | Orkla ASA vs. DnB ASA | Orkla ASA vs. Yara International ASA | Orkla ASA vs. Storebrand ASA |
| HAV Group vs. Bien Sparebank ASA | HAV Group vs. Polaris Media | HAV Group vs. Romerike Sparebank | HAV Group vs. Skue Sparebank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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