Correlation Between XXL ASA and Andfjord Salmon
Can any of the company-specific risk be diversified away by investing in both XXL ASA and Andfjord Salmon 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 XXL ASA and Andfjord Salmon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XXL ASA and Andfjord Salmon AS, you can compare the effects of market volatilities on XXL ASA and Andfjord Salmon 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 XXL ASA with a short position of Andfjord Salmon. Check out your portfolio center. Please also check ongoing floating volatility patterns of XXL ASA and Andfjord Salmon.
Diversification Opportunities for XXL ASA and Andfjord Salmon
-0.97 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XXL and Andfjord is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding XXL ASA and Andfjord Salmon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andfjord Salmon AS and XXL 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 XXL ASA are associated (or correlated) with Andfjord Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andfjord Salmon AS has no effect on the direction of XXL ASA i.e., XXL ASA and Andfjord Salmon go up and down completely randomly.
Pair Corralation between XXL ASA and Andfjord Salmon
Assuming the 90 days trading horizon XXL ASA is expected to under-perform the Andfjord Salmon. In addition to that, XXL ASA is 4.95 times more volatile than Andfjord Salmon AS. It trades about -0.27 of its total potential returns per unit of risk. Andfjord Salmon AS is currently generating about 0.26 per unit of volatility. If you would invest 3,100 in Andfjord Salmon AS on August 25, 2024 and sell it today you would earn a total of 900.00 from holding Andfjord Salmon AS or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XXL ASA vs. Andfjord Salmon AS
Performance |
| Timeline |
| XXL ASA |
| Andfjord Salmon AS |
XXL ASA and Andfjord Salmon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XXL ASA and Andfjord Salmon
The main advantage of trading using opposite XXL ASA and Andfjord Salmon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XXL ASA position performs unexpectedly, Andfjord Salmon 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 Andfjord Salmon will offset losses from the drop in Andfjord Salmon's long position.The idea behind XXL ASA and Andfjord Salmon AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Andfjord Salmon vs. Arctic Fish Holding | Andfjord Salmon vs. Ice Fish Farm | Andfjord Salmon vs. Elkem ASA | Andfjord Salmon 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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