Correlation Between Vow Green and Aker Carbon
Can any of the company-specific risk be diversified away by investing in both Vow Green and Aker Carbon 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 Vow Green and Aker Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vow Green Metals and Aker Carbon Capture, you can compare the effects of market volatilities on Vow Green and Aker Carbon 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 Vow Green with a short position of Aker Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vow Green and Aker Carbon.
Diversification Opportunities for Vow Green and Aker Carbon
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vow and Aker is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vow Green Metals and Aker Carbon Capture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Carbon Capture and Vow Green 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 Vow Green Metals are associated (or correlated) with Aker Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Carbon Capture has no effect on the direction of Vow Green i.e., Vow Green and Aker Carbon go up and down completely randomly.
Pair Corralation between Vow Green and Aker Carbon
Assuming the 90 days trading horizon Vow Green Metals is expected to under-perform the Aker Carbon. In addition to that, Vow Green is 2.66 times more volatile than Aker Carbon Capture. It trades about -0.09 of its total potential returns per unit of risk. Aker Carbon Capture is currently generating about -0.15 per unit of volatility. If you would invest 617.00 in Aker Carbon Capture on August 24, 2024 and sell it today you would lose (39.00) from holding Aker Carbon Capture or give up 6.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vow Green Metals vs. Aker Carbon Capture
Performance |
| Timeline |
| Vow Green Metals |
| Aker Carbon Capture |
Vow Green and Aker Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vow Green and Aker Carbon
The main advantage of trading using opposite Vow Green and Aker Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vow Green position performs unexpectedly, Aker Carbon 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 Carbon will offset losses from the drop in Aker Carbon's long position.| Vow Green vs. Tomra Systems ASA | Vow Green vs. Waste Plastic Upcycling | Vow Green vs. Elkem ASA | Vow Green vs. Vow 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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