Correlation Between Saga Pure and Otello ASA
Can any of the company-specific risk be diversified away by investing in both Saga Pure and Otello 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 Otello 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 Otello ASA, you can compare the effects of market volatilities on Saga Pure and Otello 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 Otello ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Pure and Otello ASA.
Diversification Opportunities for Saga Pure and Otello ASA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saga and Otello is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Saga Pure ASA and Otello ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otello 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 Otello ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otello ASA has no effect on the direction of Saga Pure i.e., Saga Pure and Otello ASA go up and down completely randomly.
Pair Corralation between Saga Pure and Otello ASA
Assuming the 90 days trading horizon Saga Pure ASA is expected to generate 0.89 times more return on investment than Otello ASA. However, Saga Pure ASA is 1.13 times less risky than Otello ASA. It trades about -0.04 of its potential returns per unit of risk. Otello ASA is currently generating about -0.04 per unit of risk. If you would invest 128.00 in Saga Pure ASA on November 2, 2024 and sell it today you would lose (3.00) from holding Saga Pure ASA or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Saga Pure ASA vs. Otello ASA
Performance |
| Timeline |
| Saga Pure ASA |
| Otello ASA |
Saga Pure and Otello ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Pure and Otello ASA
The main advantage of trading using opposite Saga Pure and Otello ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Pure position performs unexpectedly, Otello 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 Otello ASA will offset losses from the drop in Otello 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 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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