Correlation Between Sea1 Offshore and Hynion AS
Can any of the company-specific risk be diversified away by investing in both Sea1 Offshore and Hynion AS 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 Sea1 Offshore and Hynion AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea1 Offshore and Hynion AS, you can compare the effects of market volatilities on Sea1 Offshore and Hynion AS 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 Sea1 Offshore with a short position of Hynion AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea1 Offshore and Hynion AS.
Diversification Opportunities for Sea1 Offshore and Hynion AS
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sea1 and Hynion is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sea1 Offshore and Hynion AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hynion AS and Sea1 Offshore 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 Sea1 Offshore are associated (or correlated) with Hynion AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hynion AS has no effect on the direction of Sea1 Offshore i.e., Sea1 Offshore and Hynion AS go up and down completely randomly.
Pair Corralation between Sea1 Offshore and Hynion AS
Assuming the 90 days trading horizon Sea1 Offshore is expected to generate 2.07 times less return on investment than Hynion AS. But when comparing it to its historical volatility, Sea1 Offshore is 2.92 times less risky than Hynion AS. It trades about 0.23 of its potential returns per unit of risk. Hynion AS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Hynion AS on October 26, 2024 and sell it today you would earn a total of 4.00 from holding Hynion AS or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea1 Offshore vs. Hynion AS
Performance |
| Timeline |
| Sea1 Offshore |
| Hynion AS |
Sea1 Offshore and Hynion AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea1 Offshore and Hynion AS
The main advantage of trading using opposite Sea1 Offshore and Hynion AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea1 Offshore position performs unexpectedly, Hynion AS 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 Hynion AS will offset losses from the drop in Hynion AS's long position.| Sea1 Offshore vs. Jaeren Sparebank | Sea1 Offshore vs. Skue Sparebank | Sea1 Offshore vs. SD Standard Drilling | Sea1 Offshore vs. Grong Sparebank |
| Hynion AS vs. Jaeren Sparebank | Hynion AS vs. Morrow Bank ASA | Hynion AS vs. Proximar Seafood AS | Hynion AS vs. Clean Seas Seafood |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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