Correlation Between Var Energi and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Var Energi and Equinor 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 Var Energi and Equinor ASA 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 Equinor ASA, you can compare the effects of market volatilities on Var Energi and Equinor 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 Var Energi with a short position of Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Var Energi and Equinor ASA.
Diversification Opportunities for Var Energi and Equinor ASA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Var and Equinor is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Var Energi ASA and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of Var Energi i.e., Var Energi and Equinor ASA go up and down completely randomly.
Pair Corralation between Var Energi and Equinor ASA
Assuming the 90 days trading horizon Var Energi ASA is expected to under-perform the Equinor ASA. In addition to that, Var Energi is 1.0 times more volatile than Equinor ASA. It trades about -0.05 of its total potential returns per unit of risk. Equinor ASA is currently generating about -0.04 per unit of volatility. If you would invest 26,401 in Equinor ASA on November 27, 2024 and sell it today you would lose (591.00) from holding Equinor ASA or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Var Energi ASA vs. Equinor ASA
Performance |
| Timeline |
| Var Energi ASA |
| Equinor ASA |
Var Energi and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Var Energi and Equinor ASA
The main advantage of trading using opposite Var Energi and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Var Energi position performs unexpectedly, Equinor 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.| Var Energi vs. Aker BP ASA | Var Energi vs. Belships | Var Energi vs. MPC Container Ships | Var Energi vs. BW Energy |
| Equinor ASA vs. DnB ASA | Equinor ASA vs. Mowi ASA | Equinor ASA vs. Yara International ASA | Equinor ASA vs. Telenor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |