Correlation Between REC Silicon and Endur ASA
Can any of the company-specific risk be diversified away by investing in both REC Silicon and Endur 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 REC Silicon and Endur ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REC Silicon ASA and Endur ASA, you can compare the effects of market volatilities on REC Silicon and Endur 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 REC Silicon with a short position of Endur ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of REC Silicon and Endur ASA.
Diversification Opportunities for REC Silicon and Endur ASA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between REC and Endur is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding REC Silicon ASA and Endur ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endur ASA and REC Silicon 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 REC Silicon ASA are associated (or correlated) with Endur ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endur ASA has no effect on the direction of REC Silicon i.e., REC Silicon and Endur ASA go up and down completely randomly.
Pair Corralation between REC Silicon and Endur ASA
Assuming the 90 days trading horizon REC Silicon ASA is expected to under-perform the Endur ASA. In addition to that, REC Silicon is 1.99 times more volatile than Endur ASA. It trades about -0.06 of its total potential returns per unit of risk. Endur ASA is currently generating about 0.05 per unit of volatility. If you would invest 4,350 in Endur ASA on August 29, 2024 and sell it today you would earn a total of 1,950 from holding Endur ASA or generate 44.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REC Silicon ASA vs. Endur ASA
Performance |
| Timeline |
| REC Silicon ASA |
| Endur ASA |
REC Silicon and Endur ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REC Silicon and Endur ASA
The main advantage of trading using opposite REC Silicon and Endur ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REC Silicon position performs unexpectedly, Endur 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 Endur ASA will offset losses from the drop in Endur ASA's long position.| REC Silicon vs. Aker Horizons AS | REC Silicon vs. MPC Container Ships | REC Silicon vs. Aker Carbon Capture | REC Silicon vs. Nordic Semiconductor ASA |
| Endur ASA vs. Magnora ASA | Endur ASA vs. Next Biometrics Group | Endur ASA vs. Idex ASA | Endur ASA vs. Eidesvik Offshore 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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