Correlation Between Prosafe SE and Aker ASA
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and Aker 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 Prosafe SE and Aker ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and Aker ASA, you can compare the effects of market volatilities on Prosafe SE and Aker 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 Prosafe SE with a short position of Aker ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and Aker ASA.
Diversification Opportunities for Prosafe SE and Aker ASA
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prosafe and Aker is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and Aker ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker ASA and Prosafe SE 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 Prosafe SE are associated (or correlated) with Aker ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker ASA has no effect on the direction of Prosafe SE i.e., Prosafe SE and Aker ASA go up and down completely randomly.
Pair Corralation between Prosafe SE and Aker ASA
Assuming the 90 days trading horizon Prosafe SE is expected to under-perform the Aker ASA. In addition to that, Prosafe SE is 2.67 times more volatile than Aker ASA. It trades about -0.14 of its total potential returns per unit of risk. Aker ASA is currently generating about -0.01 per unit of volatility. If you would invest 63,804 in Aker ASA on September 3, 2024 and sell it today you would lose (6,304) from holding Aker ASA or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. Aker ASA
Performance |
| Timeline |
| Prosafe SE |
| Aker ASA |
Prosafe SE and Aker ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and Aker ASA
The main advantage of trading using opposite Prosafe SE and Aker ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, Aker 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 Aker ASA will offset losses from the drop in Aker ASA's long position.| Prosafe SE vs. Aker ASA | Prosafe SE vs. Subsea 7 SA | Prosafe SE vs. Aker Solutions ASA | Prosafe SE vs. TGS NOPEC Geophysical |
| Aker ASA vs. Storebrand ASA | Aker ASA vs. Aker Solutions ASA | Aker ASA vs. DnB ASA | Aker ASA vs. Orkla 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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