Correlation Between Polight ASA and Bouvet
Can any of the company-specific risk be diversified away by investing in both Polight ASA and Bouvet 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 Polight ASA and Bouvet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polight ASA and Bouvet, you can compare the effects of market volatilities on Polight ASA and Bouvet 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 Polight ASA with a short position of Bouvet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polight ASA and Bouvet.
Diversification Opportunities for Polight ASA and Bouvet
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Polight and Bouvet is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Polight ASA and Bouvet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouvet and Polight 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 Polight ASA are associated (or correlated) with Bouvet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bouvet has no effect on the direction of Polight ASA i.e., Polight ASA and Bouvet go up and down completely randomly.
Pair Corralation between Polight ASA and Bouvet
Assuming the 90 days trading horizon Polight ASA is expected to generate 3.1 times more return on investment than Bouvet. However, Polight ASA is 3.1 times more volatile than Bouvet. It trades about 0.24 of its potential returns per unit of risk. Bouvet is currently generating about 0.13 per unit of risk. If you would invest 415.00 in Polight ASA on September 13, 2024 and sell it today you would earn a total of 97.00 from holding Polight ASA or generate 23.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polight ASA vs. Bouvet
Performance |
| Timeline |
| Polight ASA |
| Bouvet |
Polight ASA and Bouvet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polight ASA and Bouvet
The main advantage of trading using opposite Polight ASA and Bouvet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polight ASA position performs unexpectedly, Bouvet 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 Bouvet will offset losses from the drop in Bouvet's long position.| Polight ASA vs. Europris ASA | Polight ASA vs. Kongsberg Gruppen ASA | Polight ASA vs. Nordic Semiconductor ASA | Polight ASA vs. Storebrand ASA |
| Bouvet vs. Huddlestock Fintech As | Bouvet vs. Xplora Technologies As | Bouvet vs. Polight ASA | Bouvet vs. Kongsberg Gruppen 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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