Correlation Between Techstep ASA and Proximar Seafood
Can any of the company-specific risk be diversified away by investing in both Techstep ASA and Proximar Seafood 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 Proximar Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techstep ASA and Proximar Seafood AS, you can compare the effects of market volatilities on Techstep ASA and Proximar Seafood 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 Proximar Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techstep ASA and Proximar Seafood.
Diversification Opportunities for Techstep ASA and Proximar Seafood
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Techstep and Proximar is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Techstep ASA and Proximar Seafood AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximar Seafood 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 Proximar Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximar Seafood has no effect on the direction of Techstep ASA i.e., Techstep ASA and Proximar Seafood go up and down completely randomly.
Pair Corralation between Techstep ASA and Proximar Seafood
Assuming the 90 days trading horizon Techstep ASA is expected to generate 1.02 times more return on investment than Proximar Seafood. However, Techstep ASA is 1.02 times more volatile than Proximar Seafood AS. It trades about 0.01 of its potential returns per unit of risk. Proximar Seafood AS is currently generating about -0.02 per unit of risk. If you would invest 1,410 in Techstep ASA on December 11, 2024 and sell it today you would lose (170.00) from holding Techstep ASA or give up 12.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techstep ASA vs. Proximar Seafood AS
Performance |
| Timeline |
| Techstep ASA |
| Proximar Seafood |
Techstep ASA and Proximar Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techstep ASA and Proximar Seafood
The main advantage of trading using opposite Techstep ASA and Proximar Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techstep ASA position performs unexpectedly, Proximar Seafood 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 Proximar Seafood will offset losses from the drop in Proximar Seafood's long position.| Techstep ASA vs. Next Biometrics Group | ||
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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