Correlation Between Var Energi and AutoStore Holdings
Can any of the company-specific risk be diversified away by investing in both Var Energi and AutoStore Holdings 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 Var Energi and AutoStore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Var Energi ASA and AutoStore Holdings, you can compare the effects of market volatilities on Var Energi and AutoStore Holdings 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 Var Energi with a short position of AutoStore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Var Energi and AutoStore Holdings.
Diversification Opportunities for Var Energi and AutoStore Holdings
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Var and AutoStore is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Var Energi ASA and AutoStore Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoStore Holdings and Var Energi 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 Var Energi ASA are associated (or correlated) with AutoStore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoStore Holdings has no effect on the direction of Var Energi i.e., Var Energi and AutoStore Holdings go up and down completely randomly.
Pair Corralation between Var Energi and AutoStore Holdings
Assuming the 90 days trading horizon Var Energi ASA is expected to generate 0.47 times more return on investment than AutoStore Holdings. However, Var Energi ASA is 2.11 times less risky than AutoStore Holdings. It trades about 0.04 of its potential returns per unit of risk. AutoStore Holdings is currently generating about 0.01 per unit of risk. If you would invest 3,167 in Var Energi ASA on September 1, 2024 and sell it today you would earn a total of 459.00 from holding Var Energi ASA or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Var Energi ASA vs. AutoStore Holdings
Performance |
| Timeline |
| Var Energi ASA |
| AutoStore Holdings |
Var Energi and AutoStore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Var Energi and AutoStore Holdings
The main advantage of trading using opposite Var Energi and AutoStore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Var Energi position performs unexpectedly, AutoStore Holdings 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 AutoStore Holdings will offset losses from the drop in AutoStore Holdings' long position.| Var Energi vs. Aker BP ASA | Var Energi vs. Belships | Var Energi vs. MPC Container Ships | Var Energi vs. BW Energy |
| AutoStore Holdings vs. Nordic Semiconductor ASA | AutoStore Holdings vs. Aker BP ASA | AutoStore Holdings vs. SalMar ASA | AutoStore Holdings vs. Scatec Solar OL |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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