Correlation Between Vow ASA and Aker Horizons
Can any of the company-specific risk be diversified away by investing in both Vow ASA and Aker Horizons 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 ASA and Aker Horizons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vow ASA and Aker Horizons AS, you can compare the effects of market volatilities on Vow ASA and Aker Horizons 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 ASA with a short position of Aker Horizons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vow ASA and Aker Horizons.
Diversification Opportunities for Vow ASA and Aker Horizons
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vow and Aker is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vow ASA and Aker Horizons AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Horizons AS and Vow 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 Vow ASA are associated (or correlated) with Aker Horizons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Horizons AS has no effect on the direction of Vow ASA i.e., Vow ASA and Aker Horizons go up and down completely randomly.
Pair Corralation between Vow ASA and Aker Horizons
Assuming the 90 days trading horizon Vow ASA is expected to under-perform the Aker Horizons. In addition to that, Vow ASA is 1.68 times more volatile than Aker Horizons AS. It trades about -0.23 of its total potential returns per unit of risk. Aker Horizons AS is currently generating about -0.31 per unit of volatility. If you would invest 255.00 in Aker Horizons AS on August 29, 2024 and sell it today you would lose (78.00) from holding Aker Horizons AS or give up 30.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vow ASA vs. Aker Horizons AS
Performance |
| Timeline |
| Vow ASA |
| Aker Horizons AS |
Vow ASA and Aker Horizons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vow ASA and Aker Horizons
The main advantage of trading using opposite Vow ASA and Aker Horizons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vow ASA position performs unexpectedly, Aker Horizons 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 Horizons will offset losses from the drop in Aker Horizons' long position.| Vow ASA vs. Arctic Bioscience AS | Vow ASA vs. ADS Maritime Holding | Vow ASA vs. Arctic Fish Holding | Vow ASA vs. Instabank ASA |
| Aker Horizons vs. Wilh Wilhelmsen Holding | Aker Horizons vs. Pareto Bank ASA | Aker Horizons vs. Selvaag Bolig ASA | Aker Horizons vs. Wilh Wilhelmsen Holding |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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