Correlation Between Techstep ASA and Aasen Sparebank
Can any of the company-specific risk be diversified away by investing in both Techstep ASA and Aasen Sparebank 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 Techstep ASA and Aasen Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techstep ASA and Aasen Sparebank, you can compare the effects of market volatilities on Techstep ASA and Aasen Sparebank 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 Techstep ASA with a short position of Aasen Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techstep ASA and Aasen Sparebank.
Diversification Opportunities for Techstep ASA and Aasen Sparebank
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Techstep and Aasen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Techstep ASA and Aasen Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aasen Sparebank and Techstep ASA 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 Techstep ASA are associated (or correlated) with Aasen Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aasen Sparebank has no effect on the direction of Techstep ASA i.e., Techstep ASA and Aasen Sparebank go up and down completely randomly.
Pair Corralation between Techstep ASA and Aasen Sparebank
Assuming the 90 days trading horizon Techstep ASA is expected to generate 1.65 times more return on investment than Aasen Sparebank. However, Techstep ASA is 1.65 times more volatile than Aasen Sparebank. It trades about 0.07 of its potential returns per unit of risk. Aasen Sparebank is currently generating about 0.0 per unit of risk. If you would invest 880.00 in Techstep ASA on September 1, 2024 and sell it today you would earn a total of 330.00 from holding Techstep ASA or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techstep ASA vs. Aasen Sparebank
Performance |
| Timeline |
| Techstep ASA |
| Aasen Sparebank |
Techstep ASA and Aasen Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techstep ASA and Aasen Sparebank
The main advantage of trading using opposite Techstep ASA and Aasen Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techstep ASA position performs unexpectedly, Aasen Sparebank 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 Aasen Sparebank will offset losses from the drop in Aasen Sparebank's long position.| Techstep ASA vs. Next Biometrics Group | Techstep ASA vs. Zalaris ASA | Techstep ASA vs. NRC Group ASA | Techstep ASA vs. Goodtech |
| Aasen Sparebank vs. Grong Sparebank | Aasen Sparebank vs. Melhus Sparebank | Aasen Sparebank vs. Aurskog Sparebank | Aasen Sparebank vs. Sparebanken Ost |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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