Correlation Between Tekna Holding and Elkem ASA
Can any of the company-specific risk be diversified away by investing in both Tekna Holding 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 Tekna Holding and Elkem ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekna Holding AS and Elkem ASA, you can compare the effects of market volatilities on Tekna Holding 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 Tekna Holding with a short position of Elkem ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekna Holding and Elkem ASA.
Diversification Opportunities for Tekna Holding and Elkem ASA
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tekna and Elkem is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tekna Holding AS and Elkem ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elkem ASA and Tekna Holding 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 Tekna Holding AS 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 Tekna Holding i.e., Tekna Holding and Elkem ASA go up and down completely randomly.
Pair Corralation between Tekna Holding and Elkem ASA
Assuming the 90 days trading horizon Tekna Holding AS is expected to under-perform the Elkem ASA. In addition to that, Tekna Holding is 3.48 times more volatile than Elkem ASA. It trades about -0.07 of its total potential returns per unit of risk. Elkem ASA is currently generating about -0.16 per unit of volatility. If you would invest 2,116 in Elkem ASA on September 13, 2024 and sell it today you would lose (242.00) from holding Elkem ASA or give up 11.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Tekna Holding AS vs. Elkem ASA
Performance |
| Timeline |
| Tekna Holding AS |
| Elkem ASA |
Tekna Holding and Elkem ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekna Holding and Elkem ASA
The main advantage of trading using opposite Tekna Holding and Elkem ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekna Holding 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.| Tekna Holding vs. 5Th Planet Games | Tekna Holding vs. Helgeland Sparebank | Tekna Holding vs. Grong Sparebank | Tekna Holding vs. Xplora Technologies As |
| Elkem ASA vs. Storebrand ASA | Elkem ASA vs. Yara International ASA | Elkem ASA vs. Lery Seafood Group | Elkem ASA vs. DnB ASA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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