Correlation Between Saga Pure and Polight ASA
Can any of the company-specific risk be diversified away by investing in both Saga Pure and Polight 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 Polight 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 Polight ASA, you can compare the effects of market volatilities on Saga Pure and Polight 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 Polight ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Pure and Polight ASA.
Diversification Opportunities for Saga Pure and Polight ASA
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Saga and Polight is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Saga Pure ASA and Polight ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polight 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 Polight ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polight ASA has no effect on the direction of Saga Pure i.e., Saga Pure and Polight ASA go up and down completely randomly.
Pair Corralation between Saga Pure and Polight ASA
Assuming the 90 days trading horizon Saga Pure is expected to generate 127.68 times less return on investment than Polight ASA. But when comparing it to its historical volatility, Saga Pure ASA is 6.28 times less risky than Polight ASA. It trades about 0.0 of its potential returns per unit of risk. Polight ASA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 257.00 in Polight ASA on September 3, 2024 and sell it today you would earn a total of 168.00 from holding Polight ASA or generate 65.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saga Pure ASA vs. Polight ASA
Performance |
| Timeline |
| Saga Pure ASA |
| Polight ASA |
Saga Pure and Polight ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saga Pure and Polight ASA
The main advantage of trading using opposite Saga Pure and Polight ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Pure position performs unexpectedly, Polight 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 Polight ASA will offset losses from the drop in Polight 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 |
| Polight ASA vs. Elliptic Laboratories AS | Polight ASA vs. Kongsberg Automotive Holding | Polight ASA vs. REC Silicon ASA | Polight ASA vs. Elkem 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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