Correlation Between Odfjell Technology and Aasen Sparebank
Can any of the company-specific risk be diversified away by investing in both Odfjell Technology and Aasen Sparebank 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 Odfjell Technology and Aasen Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Technology and Aasen Sparebank, you can compare the effects of market volatilities on Odfjell Technology and Aasen Sparebank 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 Odfjell Technology with a short position of Aasen Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Technology and Aasen Sparebank.
Diversification Opportunities for Odfjell Technology and Aasen Sparebank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Odfjell and Aasen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Technology and Aasen Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aasen Sparebank and Odfjell Technology 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 Odfjell Technology are associated (or correlated) with Aasen Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aasen Sparebank has no effect on the direction of Odfjell Technology i.e., Odfjell Technology and Aasen Sparebank go up and down completely randomly.
Pair Corralation between Odfjell Technology and Aasen Sparebank
Assuming the 90 days trading horizon Odfjell Technology is expected to generate 1.84 times more return on investment than Aasen Sparebank. However, Odfjell Technology is 1.84 times more volatile than Aasen Sparebank. It trades about 0.03 of its potential returns per unit of risk. Aasen Sparebank is currently generating about 0.03 per unit of risk. If you would invest 3,566 in Odfjell Technology on November 2, 2024 and sell it today you would earn a total of 1,014 from holding Odfjell Technology or generate 28.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odfjell Technology vs. Aasen Sparebank
Performance |
| Timeline |
| Odfjell Technology |
| Aasen Sparebank |
Odfjell Technology and Aasen Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Technology and Aasen Sparebank
The main advantage of trading using opposite Odfjell Technology and Aasen Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Technology position performs unexpectedly, Aasen Sparebank 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 Aasen Sparebank will offset losses from the drop in Aasen Sparebank's long position.| Odfjell Technology vs. NorAm Drilling AS | Odfjell Technology vs. Grieg Seafood ASA | Odfjell Technology vs. Nordhealth AS | Odfjell Technology vs. Cloudberry Clean Energy |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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