Correlation Between Techstep ASA and Ocean Sun
Can any of the company-specific risk be diversified away by investing in both Techstep ASA and Ocean Sun 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 Ocean Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techstep ASA and Ocean Sun As, you can compare the effects of market volatilities on Techstep ASA and Ocean Sun 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 Ocean Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techstep ASA and Ocean Sun.
Diversification Opportunities for Techstep ASA and Ocean Sun
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Techstep and Ocean is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Techstep ASA and Ocean Sun As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Sun As 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 Ocean Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Sun As has no effect on the direction of Techstep ASA i.e., Techstep ASA and Ocean Sun go up and down completely randomly.
Pair Corralation between Techstep ASA and Ocean Sun
Assuming the 90 days trading horizon Techstep ASA is expected to generate 0.57 times more return on investment than Ocean Sun. However, Techstep ASA is 1.75 times less risky than Ocean Sun. It trades about 0.03 of its potential returns per unit of risk. Ocean Sun As is currently generating about -0.05 per unit of risk. If you would invest 1,200 in Techstep ASA on September 14, 2024 and sell it today you would earn a total of 15.00 from holding Techstep ASA or generate 1.25% 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. Ocean Sun As
Performance |
| Timeline |
| Techstep ASA |
| Ocean Sun As |
Techstep ASA and Ocean Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techstep ASA and Ocean Sun
The main advantage of trading using opposite Techstep ASA and Ocean Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techstep ASA position performs unexpectedly, Ocean Sun 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 Ocean Sun will offset losses from the drop in Ocean Sun's long position.| Techstep ASA vs. Next Biometrics Group | Techstep ASA vs. Goodtech | Techstep ASA vs. Kongsberg Gruppen ASA | Techstep ASA vs. Napatech AS |
| Ocean Sun vs. Grieg Seafood ASA | Ocean Sun vs. Techstep ASA | Ocean Sun vs. Goodtech | Ocean Sun vs. 5Th Planet Games |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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