Correlation Between Saga Pure and Airthings ASA
Can any of the company-specific risk be diversified away by investing in both Saga Pure and Airthings 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 Saga Pure and Airthings ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga Pure ASA and Airthings ASA, you can compare the effects of market volatilities on Saga Pure and Airthings 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 Saga Pure with a short position of Airthings ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Pure and Airthings ASA.
Diversification Opportunities for Saga Pure and Airthings ASA
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Saga and Airthings is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Saga Pure ASA and Airthings ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airthings ASA and Saga Pure 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 Saga Pure ASA are associated (or correlated) with Airthings ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airthings ASA has no effect on the direction of Saga Pure i.e., Saga Pure and Airthings ASA go up and down completely randomly.
Pair Corralation between Saga Pure and Airthings ASA
Assuming the 90 days trading horizon Saga Pure ASA is expected to generate 0.41 times more return on investment than Airthings ASA. However, Saga Pure ASA is 2.43 times less risky than Airthings ASA. It trades about -0.06 of its potential returns per unit of risk. Airthings ASA is currently generating about -0.04 per unit of risk. If you would invest 129.00 in Saga Pure ASA on September 1, 2024 and sell it today you would lose (2.00) from holding Saga Pure ASA or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saga Pure ASA vs. Airthings ASA
Performance |
| Timeline |
| Saga Pure ASA |
| Airthings ASA |
Saga Pure and Airthings ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Pure and Airthings ASA
The main advantage of trading using opposite Saga Pure and Airthings ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Pure position performs unexpectedly, Airthings 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 Airthings ASA will offset losses from the drop in Airthings ASA's long position.| Saga Pure vs. Aker Horizons AS | Saga Pure vs. REC Silicon ASA | Saga Pure vs. Kongsberg Automotive Holding | Saga Pure vs. Aker Carbon Capture |
| Airthings ASA vs. Atlantic Sapphire As | Airthings ASA vs. Vow ASA | Airthings ASA vs. Aker Horizons AS | Airthings ASA vs. Saga Pure 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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