Correlation Between Yara International and Var Energi
Can any of the company-specific risk be diversified away by investing in both Yara International and Var Energi 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 Yara International and Var Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and Var Energi ASA, you can compare the effects of market volatilities on Yara International and Var Energi 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 Yara International with a short position of Var Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and Var Energi.
Diversification Opportunities for Yara International and Var Energi
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yara and Var is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and Var Energi ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Var Energi ASA and Yara International 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 Yara International ASA are associated (or correlated) with Var Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Var Energi ASA has no effect on the direction of Yara International i.e., Yara International and Var Energi go up and down completely randomly.
Pair Corralation between Yara International and Var Energi
Assuming the 90 days trading horizon Yara International ASA is expected to under-perform the Var Energi. But the stock apears to be less risky and, when comparing its historical volatility, Yara International ASA is 1.11 times less risky than Var Energi. The stock trades about -0.01 of its potential returns per unit of risk. The Var Energi ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,971 in Var Energi ASA on November 27, 2024 and sell it today you would earn a total of 1,330 from holding Var Energi ASA or generate 67.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. Var Energi ASA
Performance |
| Timeline |
| Yara International ASA |
| Var Energi ASA |
Yara International and Var Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and Var Energi
The main advantage of trading using opposite Yara International and Var Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International position performs unexpectedly, Var Energi 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 Var Energi will offset losses from the drop in Var Energi's long position.| Yara International vs. Telenor ASA | Yara International vs. Orkla ASA | Yara International vs. DnB ASA | Yara International vs. Storebrand ASA |
| Var Energi vs. Aker BP ASA | Var Energi vs. Belships | Var Energi vs. MPC Container Ships | Var Energi vs. BW Energy |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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