Correlation Between Teco 2030 and Elkem ASA
Can any of the company-specific risk be diversified away by investing in both Teco 2030 and Elkem 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 Teco 2030 and Elkem ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teco 2030 Asa and Elkem ASA, you can compare the effects of market volatilities on Teco 2030 and Elkem 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 Teco 2030 with a short position of Elkem ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teco 2030 and Elkem ASA.
Diversification Opportunities for Teco 2030 and Elkem ASA
Average diversification
The 3 months correlation between Teco and Elkem is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Teco 2030 Asa and Elkem ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elkem ASA and Teco 2030 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 Teco 2030 Asa are associated (or correlated) with Elkem ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elkem ASA has no effect on the direction of Teco 2030 i.e., Teco 2030 and Elkem ASA go up and down completely randomly.
Pair Corralation between Teco 2030 and Elkem ASA
Assuming the 90 days trading horizon Teco 2030 Asa is expected to under-perform the Elkem ASA. In addition to that, Teco 2030 is 8.28 times more volatile than Elkem ASA. It trades about -0.22 of its total potential returns per unit of risk. Elkem ASA is currently generating about 0.05 per unit of volatility. If you would invest 1,794 in Elkem ASA on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Elkem ASA or generate 1.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Teco 2030 Asa vs. Elkem ASA
Performance |
Timeline |
Teco 2030 Asa |
Elkem ASA |
Teco 2030 and Elkem ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teco 2030 and Elkem ASA
The main advantage of trading using opposite Teco 2030 and Elkem ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teco 2030 position performs unexpectedly, Elkem 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 Elkem ASA will offset losses from the drop in Elkem ASA's long position.Teco 2030 vs. Aurskog Sparebank | Teco 2030 vs. SpareBank 1 stlandet | Teco 2030 vs. Instabank ASA | Teco 2030 vs. Nidaros Sparebank |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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