Correlation Between Photocure and Vow ASA
Can any of the company-specific risk be diversified away by investing in both Photocure and Vow 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 Photocure and Vow ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photocure and Vow ASA, you can compare the effects of market volatilities on Photocure and Vow 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 Photocure with a short position of Vow ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photocure and Vow ASA.
Diversification Opportunities for Photocure and Vow ASA
Very weak diversification
The 3 months correlation between Photocure and Vow is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Photocure and Vow ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vow ASA and Photocure 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 Photocure are associated (or correlated) with Vow ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vow ASA has no effect on the direction of Photocure i.e., Photocure and Vow ASA go up and down completely randomly.
Pair Corralation between Photocure and Vow ASA
Assuming the 90 days trading horizon Photocure is expected to generate 0.64 times more return on investment than Vow ASA. However, Photocure is 1.56 times less risky than Vow ASA. It trades about 0.01 of its potential returns per unit of risk. Vow ASA is currently generating about -0.07 per unit of risk. If you would invest 5,070 in Photocure on August 31, 2024 and sell it today you would lose (140.00) from holding Photocure or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Photocure vs. Vow ASA
Performance |
| Timeline |
| Photocure |
| Vow ASA |
Photocure and Vow ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photocure and Vow ASA
The main advantage of trading using opposite Photocure and Vow ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photocure position performs unexpectedly, Vow 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 Vow ASA will offset losses from the drop in Vow ASA's long position.| Photocure vs. Sunndal Sparebank | Photocure vs. Nordic Mining ASA | Photocure vs. Skue Sparebank | Photocure vs. Lea Bank ASA |
| Vow ASA vs. Hexagon Composites ASA | Vow ASA vs. Vow Green Metals | Vow ASA vs. REC Silicon ASA | Vow ASA vs. Aker Carbon Capture |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets |