Correlation Between Ultimovacs ASA and Aker Solutions
Can any of the company-specific risk be diversified away by investing in both Ultimovacs ASA and Aker Solutions 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 Ultimovacs ASA and Aker Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultimovacs ASA and Aker Solutions ASA, you can compare the effects of market volatilities on Ultimovacs ASA and Aker Solutions 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 Ultimovacs ASA with a short position of Aker Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimovacs ASA and Aker Solutions.
Diversification Opportunities for Ultimovacs ASA and Aker Solutions
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ultimovacs and Aker is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ultimovacs ASA and Aker Solutions ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Solutions ASA and Ultimovacs 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 Ultimovacs ASA are associated (or correlated) with Aker Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Solutions ASA has no effect on the direction of Ultimovacs ASA i.e., Ultimovacs ASA and Aker Solutions go up and down completely randomly.
Pair Corralation between Ultimovacs ASA and Aker Solutions
Assuming the 90 days trading horizon Ultimovacs ASA is expected to under-perform the Aker Solutions. In addition to that, Ultimovacs ASA is 1.41 times more volatile than Aker Solutions ASA. It trades about -0.35 of its total potential returns per unit of risk. Aker Solutions ASA is currently generating about 0.1 per unit of volatility. If you would invest 3,044 in Aker Solutions ASA on October 20, 2024 and sell it today you would earn a total of 116.00 from holding Aker Solutions ASA or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultimovacs ASA vs. Aker Solutions ASA
Performance |
| Timeline |
| Ultimovacs ASA |
| Aker Solutions ASA |
Ultimovacs ASA and Aker Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultimovacs ASA and Aker Solutions
The main advantage of trading using opposite Ultimovacs ASA and Aker Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimovacs ASA position performs unexpectedly, Aker Solutions 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 Aker Solutions will offset losses from the drop in Aker Solutions' long position.| Ultimovacs ASA vs. Bergenbio ASA | Ultimovacs ASA vs. Nykode Therapeutics ASA | Ultimovacs ASA vs. PCI Biotech Holding |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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