Correlation Between Pyrum Innovations and Aasen Sparebank
Can any of the company-specific risk be diversified away by investing in both Pyrum Innovations 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 Pyrum Innovations and Aasen Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pyrum Innovations AG and Aasen Sparebank, you can compare the effects of market volatilities on Pyrum Innovations 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 Pyrum Innovations with a short position of Aasen Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyrum Innovations and Aasen Sparebank.
Diversification Opportunities for Pyrum Innovations and Aasen Sparebank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pyrum and Aasen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pyrum Innovations AG and Aasen Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aasen Sparebank and Pyrum Innovations 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 Pyrum Innovations AG 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 Pyrum Innovations i.e., Pyrum Innovations and Aasen Sparebank go up and down completely randomly.
Pair Corralation between Pyrum Innovations and Aasen Sparebank
Assuming the 90 days trading horizon Pyrum Innovations AG is expected to under-perform the Aasen Sparebank. In addition to that, Pyrum Innovations is 1.55 times more volatile than Aasen Sparebank. It trades about -0.03 of its total potential returns per unit of risk. Aasen Sparebank is currently generating about 0.04 per unit of volatility. If you would invest 11,790 in Aasen Sparebank on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Aasen Sparebank or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pyrum Innovations AG vs. Aasen Sparebank
Performance |
| Timeline |
| Pyrum Innovations |
| Aasen Sparebank |
Pyrum Innovations and Aasen Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyrum Innovations and Aasen Sparebank
The main advantage of trading using opposite Pyrum Innovations and Aasen Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyrum Innovations 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.| Pyrum Innovations vs. Aker Horizons AS | Pyrum Innovations vs. Aker Solutions ASA | Pyrum Innovations vs. REC Silicon ASA | Pyrum Innovations vs. Elkem ASA |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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