Correlation Between Var Energi and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Var Energi and Nel 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 Nel 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 Nel ASA, you can compare the effects of market volatilities on Var Energi and Nel 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Var Energi and Nel ASA.
Diversification Opportunities for Var Energi and Nel ASA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Var and Nel is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Var Energi ASA and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Var Energi i.e., Var Energi and Nel ASA go up and down completely randomly.
Pair Corralation between Var Energi and Nel ASA
Assuming the 90 days trading horizon Var Energi ASA is expected to generate 0.43 times more return on investment than Nel ASA. However, Var Energi ASA is 2.34 times less risky than Nel ASA. It trades about 0.22 of its potential returns per unit of risk. Nel ASA is currently generating about -0.44 per unit of risk. If you would invest 3,447 in Var Energi ASA on August 28, 2024 and sell it today you would earn a total of 269.00 from holding Var Energi ASA or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Var Energi ASA vs. Nel ASA
Performance |
| Timeline |
| Var Energi ASA |
| Nel ASA |
Var Energi and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Var Energi and Nel ASA
The main advantage of trading using opposite Var Energi and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Var Energi position performs unexpectedly, Nel 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| Var Energi vs. Aker BP ASA | Var Energi vs. Belships | Var Energi vs. MPC Container Ships | Var Energi vs. 2020 Bulkers |
| Nel ASA vs. Eidesvik Offshore ASA | Nel ASA vs. Kitron ASA | Nel ASA vs. Havila Shipping ASA | Nel ASA vs. Elkem 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |